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SAN FRANCISCO 
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SAN FRANCISCO PUBLIC LIBRARY 



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/& S£1 ^ C \ City and County of San Francisco Clt y Ha11 

3f (°(£&£l&\2\ Meeting Minutes Goodiett place 

I " L ■tEvIi' jB l-nl San Francisco, CA 

•> ^-//V^flHHfllg 1 / Finance and Labor Committee 94102-4089 

\JwTo2X Members: Supervisors Leland Yee, Sue Merman and Tom Ammiano 

Clerk: Mary Red 

I3M4 Wednesday, November 03, 1999 10:00 AM City Hall, Room 263 

'' Regular Meeting 

Members Present: Leland Y. Yee, Sue Bierman, Tom Ammiano. 



Meeting Convened 

The meeting convened at 10:12 a.m. 

991964 [Calling Special Election for Academy of Science Bonds] 

Supervisors Yaki, Ammiano, Becerril, Bierman, Brown, Katz, Kaufman, Leno, Newsom, Teng, Yee 

Ordinance calling and providing for a special election to be held in the City and County of San Francisco on 
Tuesday, March 7, 2000, for the purpose of submitting to the voters of the City and County a proposition to 
incur the following bonded debt of the City and County: eighty-seven million four hundred forty-five thousand 
dollars ($87,445,000) for the acquisition, construction and reconstruction of certain improvements to the 
California Academy of Sciences; finding that the estimated costs of such proposed project is and will be too 
great to be paid out of the ordinary annual income and revenue of the City and County and will require 
expenditures greater than the amount allowed therefor by the annual tax levy; reciting the estimated cost of 
such proposed projects; waiving certain requirements of Section 2.31 of the San Francisco Administrative 
Code relating to the introduction of public interest and necessity resolutions; fixing the date of election and the 
manner of holding such election and the procedure for voting for or against the proposition; fixing the 
maximum rate of interest on such bonds and providing for the levy and collection of taxes to pay both 
principal and interest thereof; prescribing notice to be given of such election; consolidating the special election 
with the presidential primary election; establishing the election precincts, voting places and officers for the 
election; and waiving the word limitation on ballot propositions imposed by San Francisco Municipal 
Elections Code Section 510. 

10/18/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Carl Schick, Supervisor Yaki's Aide; Martha 
Kropf, Academy of Science; Supervisor Ammiano. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 

DOCUMENTS DEPT. 

NOV 8 1993 

SAN FRANCISCO 
PUBLIC LIBP 



City and County of San Francisco I Primed at 3:32 PM on 11/4/99 



Finance and Labor Committee 



Meeting Minutes 



\ovember I If VI 



991537 [Appropriation, S.F. Unified School District| 

Ordinance appropriating $60,713,766, San Francisco Unified School District, of school Bond proceeds for 

capital improvement projects on various school facilities, cost of issuance, and other related costs for fiscal 

year 1999-2000. (Controller) 

8/4/99, RECEIVED AND ASSIGNED to finance and Labor Committee 

9/15/99, CONTINUED. Heard in Committee Speakers Harvey Rttc, Budget Analyst; hm [ronton, S.F I inificd School District, 

Supervisor Yee, Supervisor Ammiano. Laura. Opshal, Mayor's Office, Ed Harrington. Controller ( ontinucd to September 29, 1999 

9/29/99, CONTINUED TO CAI I ()l I III ( IIAIK 

10/27/99, CONTINUED Continued to November 3, 1999. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst, Laura Bordelon, Minor's Office of Finance. 
Tim Tronson, S.F Unified School District; Supervisor Yee; Enrique Novas, Chief Financial Officer. SFUSD. 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



991852 [Lease and Use Agreement Modifications to allow eight (8) airlines to relocate all international flight 
operations from Central Terminal Building to a new International Terminal Building as part of the 
Airport Master Plan Expansion Program| 

Resolution approving modifications the terms of Airline/Airport Lease and Use Agreements between the City 
and various airlines to allow such airlines to relocate international flight operations to the New International 
Terminal. (Airport Commission) 

9/28/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 
10/13/99. CONTINUED Continued to October 20, 1999. 
10/20/99, CONTINUED. Continued to November 3. 1999. 

Heard in Committee. Speakers Harvey Rose. Budget Analyst, Peter Nardoza. Deputy Director. Airport, 
Supen'isor Ammiano; Living Wage Coalition members Ken Jacobs; Robert O'Malie) . Karl Kramer. 
REFERRED WITHOUT RECOMMENDATION by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



991853 | New lease and operating agreements to allow eighteen (18) airlines to relocate all international flight 
operations from Central Terminal Building to a new International Terminal Building as part of the 
Airport Master Plan Expansion Program) 

Resolution approving the terms of lease and operating agreements between the City and various airlines to 
allow such airlines to relocate international flight operations to the New International Terminal. (Airport 
Commission) 

9/28/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 
10/13/99, CONTINUED Continued to October 20, 1999 
10/20/99, CONTINUED. Continued to November 3, 1999 

Heard in Committee. Speakers: Haney Rose. Budget Analyst; Peter Nardoza. Deputy Director. Airport. 
Supervisor Ammiano; Living Wage Coalition members: Ken Jacobs; Robert O'Malley. Karl Kramer 
REFERRED WITHOUT RECOMMENDATION by the following vote: 

Ayes: 3 - Yee, Bierman, Ammiano 



City and Count}' of San Francisco 



Printed at 1:32 PM on 1 1 * V9 



3 1223 05718 3296 



Finance and Labor Committee 



Meeting Minutes 



November 3, 1999 



991811 [Ferry Building Lease and Negative Declaration] 

Resolution approving lease with Ferry Building Investors, LLC, for the rehabilitation of the Ferry Building 
(The Embarcadero and Market Street) as a mixed use project; approving Negative Declaration. (Port) 

(Final Negative Declaration adopted and issued October 1, 1998.) 

9/22/99, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 10/27/1999. 

Continued to November 1 7, 1999. 

CONTINUED by the following vote: 

Ayes: 3 - Yee, Bierman, Ammiano 



991869 [Approving amendment to the Post-Security Master/Retail Duty Free Concession Lease for the New 
International Terminal] 

Resolution approving Post-Security Master Retail/Duty Free Concession Lease between DFS Group L.P. and 
the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 
9/30/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 
10/22/99, SUBSTITUTED. Substituted by Airport Commission 10/22/99, bearing new title. 
10/22/99, ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Director, Airport; Supen'isor 
Yee. Continued to November 10, 1999. 
CONTINUED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



990852 [Reserved Funds, Port) 

Hearing to consider release of reserved funds. Port, (S.F. Harbor Operating Funds, Ordinance No. 196-95), in 

the amount of $769,103, to fund the Pier 35 Cruise Terminal Escalator/Elevator Project. (Port) 

4/28/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

10/22/99, SUBSTITUTED. Substituted by Port, 10/22/99, revising the amount requested for Pier 35 release from S645.481 to S769.103. 

10/22/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers; Harvey Rose, Budget Analyst; Ben Kutnick, Director of Finance. Port. 

Table at request of the sponsor. 

FILED by the following vote: 

Ayes: 3 - Yee, Bierman, Ammiano 



991970 [Treasure Island Cooperative Agreement with Navy] 
Mayor 

Resolution approving and authorizing the Treasure Island Development Authority to enter into a cooperative 
agreement with the Navy whereby the Treasure Island Development Authority will assume certain 
responsibilities regarding the operation and maintenance of Treasure Island, and the Navy will reimburse the 
Authority for the costs therefor. 
10/18/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Robert Mahoney, Treasure Island 

Development Authority. Amended to provide retroactivity New title 
AMENDED. 



City and County of San Francisco 



Printed at 1:12 PM on 1 1 4 ff 

7 45243 SFPL: ECONO JRS 
206 SFPL 11/22/00 67 



Finance and Labor Committee Meeting Minutes November 3, 1999 

Resolution approving and authorizing retroactively, the Treasure Island Development Authority to enter into a 
cooperative agreement with the Navy whereby the Treasure Island Development Authority will assume certain 
responsibilities regarding the operation and maintenance of Treasure Island, and the Navy will reimburse the 
Authority for the costs therefor. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



ADJOURNMENT 



The meeting adjourned at 1 1 00 a ni 



City- and County of San Francisco 4 Printed at 3:32 PW on 1 1 4V9 



6f 

11/3 M 



Public Library,Gov't Info. Ctr., 5 th Fir. 
Attn: Susan Horn 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 



BUDGET ANALYST 



1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



October 29, 1999 
TO: finance and Labor Committee 

FROM: %, Budget Analyst 

SUBJECT: ^November 3, 1999 Finance and Labor Committee Meeting 
Item 1 - File 99-1964 



Department: 
Item: 



DOCUMENTS DEPT. 

NOV 2 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 



California Academy of Sciences 

Ordinance calling and providing for a Special Election 
to be held in the City and County of San Francisco on 
Tuesday, March 7, 2000, for the purpose of submitting 
to the voters of the City and County of San Francisco a 
proposition to incur $87,445,000 of bonded 
indebtedness for the acquisition, construction and 
reconstruction of certain improvements to the 
California Academy of Sciences; finding that the 
estimated costs of such proposed project is and will be 
too great to be paid out of the ordinar}* annual income 
and revenue of the City and County and will require 
expenditures greater than the amount allowed 
therefore by the annual tax lew; reciting the 
estimated cost of such proposed projects; waiving 
certain requirements of Section 2.31 of the San 
Francisco Administrative Code relating to the 
introduction of public interest and necessity 
resolutions; fixing the date of election for March 7, 
2000 and the manner of holding such election as well 
as the procedure for voting for or against the 
proposition; fixing the maximum rate of interest on 
such bonds and providing for the levy and collection of 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

taxes to pay both principal and interest thereof; 
prescribing notice to be given of such election; 
consolidating the Special Election with the 
Presidential Primary Election; establishing the 
election precincts, voting places and officers for the 
election; and waiving the word limitation on ballot 
propositions imposed by San Francisco Municipal 
Elections Code Section 510. 

Description: The State General Obligation Bond Law requires that 

in order for the City to issue General Obligation 
Bonds, a resolution of public convenience and necessity 
must first be adopted by a two-thirds vote of the Board 
of Supervisors, and the proposed bonds must then be 
approved by two-thirds of electorate. On October 25, 
1999, the Board of Supervisors approved a resolution 
declaring that the public interest and necessity 
demand improvements to the California Academy of 
Sciences by the City and County (File 99-1770). 

The proposed ordinance would provide for a Special 
Election to be held and consolidated with the 
Presidential Primary Election scheduled to be held on 
Tuesday, March 7, 2000 in order to submit to the 
voters a proposition to incur bonded indebtedness of 
the City and County, in the principal amount of 
$87,445,000, for improvements to the California 
Academv of Sciences. 



Budget: 



Financing for a renovated, seismically upgraded and 
expanded 428,443 square foot Academy of Sciences 
facility (the existing facility is 378,443 square feet) at 
an estimated total cost of $147,445,000 would be 
funded by (a) the subject proposed $87,445,000 in 
General Obligation Bonds to be authorized by the 
electorate and (b) private financing in the amount of 
$60,000,000 to be raised by the California Academy of 
Sciences through private contributions and other 
government funds. 

A summary budget of $146,230,000 for the estimated 
project costs, excluding the financing costs, is shown in 
the Attachment to this report. In addition, financing 
costs totaling $1,215,000 result in total estimated 
costs of $147,445,000. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Comments: 1. According to Ms. Sarah Hollenbeck of the Mayor s 

Office of Public Finance, the City Charter provides for 
a legal debt limit of three percent of net assessed 
property value. The Mayor's Office of Public Finance 
has calculated the City's Debt Limit Ratio as follows: 

Total Debt Limit for FY 1999-2000 $2,114,446,916 

Estimated Outstanding General Obligation Bonds 

As of June 30, 2000 967.925.000 

Remaining General Obligation Capacity $1,146,521,916 

However, it should also be noted that the Laguna 
Honda Hospital General Obligation bond measure for 
$299,000,000 is on the November 2, 1999 ballot, which 
if approved by the voters, would further reduce the 
City's remaining General Obligation bonding capacity 
to $847,521,916. 

2. If the subject Academy of Sciences bond issue of 
$87,445,000 proposed for the March of 2000 ballot 
were also to be approved by the voters, the remaining 
General Obligation bonding capacity would then be 
reduced to $760,076,916. However, Ms. Hollenbeck 
advises that the Academy of Sciences bonds are 
anticipated to be sold in two separate issuances, thus 
allowing for a slightly larger General Obligation 
bonding capacity to remain until the subsequent bonds 
are sold. According to Ms. Hollenbeck, the amount of 
debt that can be issued in any given year is partly a 
function of the level of payments on existing debt, 
which fluctuates as older bond issues are retired and 
new bonds are issued. 

The Budget Analyst also notes that an ordinance for 
$110,000,000 of General Obligation bonds for the 
Recreation and Park Department may also be 
scheduled to be brought to the voters on March 7, 
2000. If this $110,000,000 Recreation and Park 
General Obligation Bond measure is also approved at 
that time, and all $110,000,000 in bonds were issued 
in FY 1999-2000, it would further reduce the City's 
General Obligation bonding capacity to $650,076,916. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



3. According to Ms. Hollenbeck. assuming the proposed 
Academy of Science bonds are issued in an interest 
environment which reflects the norms for the past ton 
years, the Academy of Science bonds would bear a true 
interest cost of six percent. It is anticipated that there 
will be two separate bond issuances, one for 
$11,380,000 in approximately May of 2000 and one for 
$76,065,000 in approximately October of 2001, for a 
total of $87,445,000. Upon issuance of the entire 
$87,445,000, the average annual debt service would be 
approximately $7,222,673 and total debt service would 
be $151,676,138 for the proposed 21-year bond period. 

4. According to Ms. Ann Carey of the Controller's 
Office, if $87,445,000 in bonds were to be issued, the 
bonds would result in an increase in the Property Tax 
rate of approximately $.011206 per $100 of assessed 
value. At this rate, the owner of a single-family 
residence assessed at $400,000, assuming the $7,000 
homeowner's exemption, would pay an average of 
$44.04 in additional annual Property Taxes beginning 
in FY 2001. 

5. According to Mr. Andy Klemer. of the Paratus 
Group, a private consulting firm retained as the 
Project Manager for the Academy of Sciences, the 
Academy of Sciences does not currently have funds set 
aside for the projected $60 million of private 
contributions and other government funds to support 
the total estimated project costs of $146,230,000. 
However, Mr. Klemer advises that the Academy of 
Sciences plans to undertake a major capital campaign 
to raise these $60 million of funds. Ms. Meagan 
Levitan of the Academy of Sciences reports that a $2.1 
billion State Parks Bond proposition, which is also 
scheduled to be on the March of 2000 ballot, contains a 
specific allocation of $10 million for the California 
Academy of Sciences project, for exhibits and 
education. Ms. Levitan advises that if approved by the 
California voters, this $10 million of State bond funds 
would be used as one of the funding sources towards 
the $60 million of funds to be raised by the Academy of 
Sciences. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



6. The Budget Analyst notes that the Bond Program 
Report states that in the event that the final project 
costs are in excess of the $87,445,000 General 
Obligation Bond monies, and any available interest 
earnings, the only source of additional funding would 
be through contributions raised by the Academy of 
Sciences. Therefore, the Budget Analyst recommends 
that the proposed ordinance be amended in order to 
limit the City's liability for cost overruns. Mr. David 
Sanchez of the City Attorney's Office states that such 
an amendment should add a Section 2 to state that 
"The Board of Supervisors of the City and County will 
not authorize the appropriation of any general fund 
moneys of the City and County, other than bond 
proceeds, including interest earnings, to pay the costs 
of the above-referenced project." 

7. The proposed ordinance would waive any and all of 
the requirements set forth in Section 2.31 of the City's 
Administrative Code relating to the timely 
introduction of public interest and necessity 
resolutions that are or maj r become applicable to 
actions of the Board of Supervisors necessary for the 
submission of this proposition. According to Mr. 
Sanchez, this provision is necessary because the 
deadline date was September 20, 1999, for the 
introduction of the resolution determining and 
declaring the public interest and necessity for the 
Academy of Sciences public improvements at an 
estimated cost of $87,445,000 to be on the March 7, 
2000 ballot (File 99-1770). However, Mr. Sanchez 
notes that this resolution was not introduced on 
September 20, 1999, because the Board of Supervisors 
did not meet on that date due to the Jewish holiday of 
Yom Kippur. Mr. Sanchez advises that the resolution 
was however, introduced on the following day, 
September 21, 1999, when the Board of Supervisors 
convened. 

8. The proposed ordinance would also waive the word 
limit for ballot propositions imposed by the San 
Francisco Municipal Elections Code Section 510. 
According to Ms. Naomi Nishioka of the Department of 
Elections, in accordance with the local Elections Code, 
the current word limit for such ballot propositions is 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance and Labor Commit' 

November 3, 1999 Finance and Labor Committee Meeting 

30 words. The Budget Analyst notes that the proposed 
ordinance currently contains 46 words, or 16 words 
more than the limit. Ms. Nishioka reports that it is not 
uncommon for General Obligation Bond measures to 
exceed the word limits imposed by the local Elections 
Code. Although the proposed $87,445,000 Academy of 
Sciences General Obligation Bond ballot measure 
exceeds the local Elections Code word limit, Ms. 
Nishioka advises that it is not likely to result in any 
significant impacts on the cost of the election. 

Recommendations: 1. In accordance with Comment No. 6 above, amend 
the proposed ordinance to add a Section 2 to state that 
"The Board of Supervisors of the City and County will 
not authorize the appropriation of any general fund 
moneys of the City and County, other than bond 
proceeds, including interest earnings, to pay the costs 
of the above -re fere need project". 

2. Approval of the proposed ordinance, as amended, is 
a policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



/ 



5' 99 (WED) 12:48 CCSF PUBLIC FINANCE 



flrcgcnrpgnt: 

J 2ge i or 2 



Proposed Public Project Budget 

Seismic Renovation and Cede Compliance 



General Construction Cost in i r.ousands 



Bond 


Other 


Total 


Funded 


Funded 


Cost 


Cost 


Cost 





.0 Earthwork and Demolition 



Totai 2.0 Building Sfiefl 



S2.S: 



529,061 



SO 



S2.S91 



2.0 Building Shefl 








Founcafiocs 


5=20 


SO 


SS20 


Substructure 


5.232 





5232 


Superstructure 


10,913 





10,913 


Architectural Finishes 


10.853 





10,663 


Mechanical Systems 


7.257 





7,257 


.EecSical Systems 


3,947. 





3.947 


Site Utilities 


250 





250 



SO S39.081 



3.0 Special Finishes 

Tank ProtecSve Coatings 
Acryfic Viewing Windows 

Total 3.0 Special Finishes 



565 




$65- 



SO 




50 



SS5 




S55 



4.0 Specialized Equipment 
Life Support Systems 
Hosts . . 
Group 1 Equipment 

Total 4.0 Specialized Equipment 



• ssao 
o 

2000 



52,380 



SO 





so 



5380 



2.000 



S2.380 



5.0 Sitework 

Service/Corporation Yard Repairs 
Terraces and Entries 
Sitework Repairs 

Total 5.0 Sitework 



Subtotal 

General Conditions 
Contractor's Overhead & Profit 

Subtotal 

5.0 Exhibitry 

Subtotal 

Scope Development Contingency 

Subtotal 

CcnstrucSon Contingency 
Escalation 

Total Construction Cost in Tncusands 



S728 


so ■ 


S728 


773 


.0 


773 


525 





525 



5.899 
8.111 



2,513' 
3,5=2 



52026 


SO 


S2.025 


$46243 


50 


S45243 ' 


5.318 





5.318 


2.052 





2,062 


$53,523 


SO 


S53.623 


SO . 


23,750 . 


S23.750 


S53.623 


S23.750 


S77.373 


5.352 


2.375 


7.737 



558,955 S26.125 585,111 



8.511 
11.703 



$72,995 532,330 $105,324 



■/ 99 (WED) 12:48 CCSF PUBLIC FINANCE 



Attach 
Page z c: ^ 



Proi-ct Cost in Thousands 



Bond Other 

Funded Funced 

Cost Cost 



Total 
Cost 



Total Construction Cost in Thousands -$72,995 S32.230 5105.324 

Other Project Costs In Thousands 

7.0 Hazardous Materials Mitigation Cost S1.2S0 SO • 51.250 



8.0 Permits 4 Fees 

Review of Existing EIR 
Professional Design Fees 
Exhibit/FF&E Design Fees 
Project 4 Construction Management 
Civil & Geotechnical Engineering 

Hazmat Mitigation Design Fees 
Security & MIS Consultants 
Permits & Plan deck Fees 
Inspections 4 Testing 
Owner's Insurance 4 Performance 3 

Utility Fees 

City Agency Fees 

Sond Legal 4 Financing 

General Project Legal Fees 

lnhouse Facilities Engineering 

Subtotal 8.0 Permits 4 Fees 



$300 


SO 


S300 





9.127 


9.'. 27 





8,082 


8,082 





3.C55 


5.055 


• 170 • 


100 


270 


45 





45 


75 





75. 


800 





800 


1,000 





1,000 


S£5 





9=5 


250 





250 


700 





700 





o • 








500 


500 





195 


195 



$4,825 S23.070 527.855 



£.0 Temporary Systems. Relocation 4 Mo $4,500 SO $4,500 

10.0FF4E SO $4,500 $4,500 

1 1.0 Telecommunications 4 Security Sys'. $1,200 $100 51.200 

12.0 Art Enrichment S1.450 SO $1,450 
Total Other Project Costs 
Total Proiect Cast 



$12,22S 527,570 S4C,SGS 



536,230 S50.000 5145,230 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Item 2 - File 99-1537 



Note: This item was continued by the Finance and Labor Committee at its 
meeting of October 27, 1999. 



Department: 
Item: 



San Francisco Unified School District (SFUSD) 

Ordinance appropriating $60,713,766 of General 
Obligation Bonds (Educational Facility Bonds, 1997A - 
SFUSD) Series 1999B proceeds for Phase I capital 
improvement projects on various school facilities, cost of 
issuance, and debt service, for the San Francisco Unified 
School District for fiscal vear 1999-2000. 



Amount: 
Source of Funds: 

Description: 



$60,713,766 

General Obligation Bonds (Educational Facility Bonds, 
1997A - SFUSD) Series 1999B, hereafter referred to as 
"Educational Facility Bonds, Series 1999B". 

On June 3, 1997, a total of $90,000,000 in General 
Obligation Bonds for the construction and upgrading of 
SFUSD educational facilities was approved by the 
electorate. Educational Facility Bonds, Series 1999B 
were issued on June 16, 1999 for the construction and/or 
reconstruction of educational facilities for the SFUSD. 
According to Ms. Laura Opsahl-Bordelon of the Maj'or's 
Office of Public Finance and Economic Development, the 
total Bond proceeds for Educational Facility Bonds, Series 
1999B are in the amount of $60,713,766. 

The subject supplemental appropriation would 
appropriate the $60,713,766 in Bond proceeds for the 
following: (a) $60,287,090 for Phase I capital 

improvement projects on various SFUSD school facilities, 
(b) $235,050 for bond issuance costs, and (c) $191,626 for 
debt service costs (accrued interest payments and a 
portion of the underwriter's premium). 

SFUSD expenditure data previously provided to the 
Budget Analyst showed that the SFUSD expended 
$37,818,784 for Phase I capital improvement projects 
without appropriation approval from the Board of 
Supervisors. As explained in Comment No. 3, revised 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Budget: 



data submitted by the SFUSD now shows that a total of 
$36,481,103 has been expended, including (a) $23,152,192 
for Phase I capital improvement projects, (b) S7, 456, 497 
for Phase II capital improvement projects, and (c) 
$5,872,414 for additional projects. 

The budget for Phase I capital improvement projects is 
summarized as follows: 





Incurred as 


Not Yet 


Total 




of 10/19/99 


Expended 


Estimated 
Costs 


Phase I Capital Improvement 


$23,152,192 


$37,134,898 


$60,287,090 


Projects (as detailed in Section 








B of Attachment I) 








Bond Issuance Costs 





235,050 


235,050 


Debt Service 





191.626 


191.626 


TOTAL 


$23,152,192 


S37.561.574 


$60,713,766 



Section B of Attachment I, provided by the SFUSD, 
contains a project budget for projects totaling $60,287,090 
for Phase I of the SFUSD's capital improvement program 
which would be funded by the Educational Facility Bonds, 
Series 1999B in FY 1999-2000. 

Section A of Attachment I also contains the proposed 
projects totaling $29,712,910 for Phase II of the SFUSD's 
capital improvements program. Together, Phases I and II 
account for the total SFUSD capital improvement 
program cost of $90,000,000. According to Mr. Tim 
Tronson of the SFUSD, the SFUSD will seek a second 
bond issuance to fund Phase II. He advises that the 
SFUSD anticipates, based on current project scheduling 
and subject to Board of Supervisors approval, that the 
second bond issuance will occur within the next 12-18 
months. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



10 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Comments: 1. In November 1997, the Board of Supervisors 

authorized and directed the sale of General Obligation 
Bonds (Educational Facility Bonds, 1997 - SFUSD) Series 
1998C not to exceed $47,000,000 (Resolution No. 149-98). 
The issuance of General Obligation Bonds (Educational 
Facility Bonds, 1997 - SFUSD) Series 1998C was delayed 
due to litigation related to Proposition D which had been 
placed on the same June 3, 1997 ballot to authorize the 
City to issue Football Stadium Bonds to finance a portion 
of a new stadium development project at Candlestick 
Point. This litigation dela}'ed bond counsel issuing a final 
opinion on the validity of the SFUSD bonds. 
Consequently, the SFUSD requested that additional Bond 
funds be issued to cover project costs for an additional 
year. On March 1, 1999 the Board of Supervisors 
authorized and directed the sale of Educational Facility 
Bonds, Series 1999B, not to exceed $64,000,000 (File 99- 
0200), thereby replacing the previous authorization of 
$47,000,000. This represented an increase of 

$17,000,000, or approximately 36 percent. 

Educational Facility Bonds, Series 1999B were issued on 
June 16, 1999 (File 99-1154). According to Ms. Opsahl- 
Bordelon, the total Bond proceeds for Educational Facility 
Bonds, Series 1999B are in the amount of $60,713,766. 

2. In July of 1998, the SFUSD submitted to the Finance 
Committee of the Board of Supervisors a budget 
breakdown of the proposed $60,287,090 Phase I capital 
improvements program to be funded by the subject 
Educational Facility Bonds, Series 1999B. Although the 
total budget of $60,287,090 remains unchanged, between 
July 1998 and October 1999 there have been various 
shifts in the allocation of funds between component 
capital improvement projects. 

In response to the request by the Finance and labor 
Committee, at its meeting of September 15, 1999, the 
SFUSD has prepared its first report, to be issued 
quarterly, pertaining to the bond expenditures. This 
report was prepared by the SFUSD after conferring with 
the Mayor's Office of Finance, the Controller's Office and 
the Office of the Budget Analyst. The SFUSD will update 
this report, on a quarterly basis, to provide a review of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



actual SFUSD spending and projected capital 
improvement project costs in order to determine the 
extent to which bond funds have been expended for the 
purposes originally identified for the issuance of the 
bonds. 

Attachment I contains (a) an explanatory cover 
memorandum from the SFUSD, (b) a summary of total 
project expenditures (Section A), and (c) a report on 
expenditures against the first bond issuance of 
$60,287,090 (Section B). 

3. As shown in Sections A and B of the SFUSD report in 
Attachment I, the SFUSD has already incurred Phase I 
capital improvement project expenditures of $23,152,192, 
or approximately 38 percent, of the subject $60,287,090 
prior to obtaining Board of Supervisors approval. In 
addition, as shown in Section A of the report m 
Attachment I. the SFUSD has already expended (a) 
$7,456,497 on preliminary Phase II design and 
architecture fees against the proposed second bond 
issuance of $29,712,910, and (b) $5,872,414 on additional 
projects. As explained in the SFUSD cover memo in 
Attachment I, the SFUSD has authorized these 
expenditures to leverage State grants in the total amount 
of $46,980,924 for capital improvements. This has 
resulted in some of the projects which were originally to 
be funded by Educational Facility Bonds, Series 1999B 
funds being funded instead by State grants, thereby 
releasing Educational Facility Bonds. Series 1999B funds 
for projects not proposed in the SFUSD's original 
program. Therefore, the SFUSD intends to complete all 
projects originally specified for Phases I and II, plus 
expend an additional $46,980,924 in State funds for other 
capital improvements, as shown in Attachment I, Section 
A. 

The SFUSD's capital improvement project expenditures to 
date, total $36,481,103 ($23,152,192 + $7,456,497 + 
$5,872,414), or approximately 40.5 percent of the total 
$90,000,000 proposed fc- Phases I and II of the SFUSD's 
capital improvements program. 

4. Attachment II is a memorandum from Mr. Tronson 
which further explains why the SFUSD has expended 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



12 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

bond funds prior to obtaining appropriation approval from 
the Board of Supervisors. 

5. This item was continued by the Finance and Labor 
Committee at its meeting of October 27, 1999 because of a 
question over the legality of expending Phase I capital 
improvement project bond funds for Phase II projects. The 
SFUSD has requested a letter from their Bond Counsel 
addressing this point. As of the writing of this report, the 
letter from SFUSD's Bond Counsel has not been issued. 

Recommendation: Because capital improvement expenditures of 

$36,481,103, or approximately 40.5 percent, of the 
$90,000,000 proposal for Phases I and II of the SFUSD's 
capital improvement program have already been incurred 
by the SFUSD prior to obtaining appropriation approval 
from the Board of Supervisors, approval of the proposed 
ordinance is a policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



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Sir* USD SAN FEANCI3C0 

UNIFIED SCHOOL DISTRICT 

FACILITIES FLAWING £ CON-STZUdTON 

•c: Alan GFcsan, Budget Analyst 

CC: Enrique \ : avas. CFO 

From: Tim TronspajUK 

Date: 09/1 Q/99 ^^ 

R— Advance Exnenditurcs 



rase 1 of 3 



In accordance with your request I am providing you with the San Francisco Unified School 
District's ("District") reasons and information related to advance expenditures of the 
anticipated proceeds from the General Obligation Bonds (Education Facility Bond, 1997A - 
San Francisco Unified School District), Series 19993 for educational improvements. The 
issues are as follows: 

1- Since the passage or the Proposition A on June 3, 1997, the District has proceeded 

w'rth the planning, review and construction of its bond funded projects. Because of 
the pendancy of the Sr 49ers' case and bond counsel's position, the District couid not 
sell the bonds to pay for the projects. Therefore, the District has fronted the costs of 
*■ these projects from hs own fund sources. The District has proceeded with these 

projects for the following reasons: 

(1 ) Long planning lead-time (see paragraph 2 below). 

(2) Availability of State funding (sec paragraph 3 below). 

(3) Several of the projects affecied the health and safety of the District's students 
and employees. Tnc District intends to use a portion of hs bond proceeds for 
such projects, including structural upgrades of buildings that do not meet 
current seismic codes. 

(4) Severs! of the projects improved the abiihy of students and employees with 
disabfjtnes to utiitzt the District's facilities. The District intends to use e 
portion of its bond proceeds to address facilities issues that "limit access to 
persons with disabiiitics- 

(5) Tne implementation of ciassroom reduction statewide has placed severe 
consrajnts on this District's ability to house elementary school children. The 
average "studems per classroom 'loading schedule" (statewide) has gone from 
32 students per classroom to 20 students per classroom. Consequentially, the 



t70/TR vT 1 "T^"7- a 4 " *■" lp ""^^"- f-* **12< TMeDhone K15) 695-5500 Fax (415) 695-5667 



Sepremoe- 10. 1999 



32 students per classroom to 20 students per classroom. Consequential h. tfac 
demand for elementary school facilities has exceedec the suppry since the 
District houses far less students on the same school she. In San rrancisec, 
we arc accommodating e portion of the student housing needs with the bond 
proceeds. These project include the planning and constructior. of (he new 
Parkside Rlmgiiuuy School. three new academic wings (Sheridan ES, Ciaire 
Liiienthai ES, Alice rone Yu ES). e gymnasium, and ar. audiioriuTr.. 

The Typical overall planning, review and constructior proecsT takes 2^-36 montH* 
depending on the scope of the project. The District does not go through the Citv 
Planning Department, for its pian review- process, the construction of facitttiei, or the 
completion of irnprovemrnts. Trie District goes through the Department of the State 
Architect (DSA) for its plan review. Tnis process takes approximately six to cisht 
months. In addition to DSA. the Disrrict goes through b Department of Education 
(DEA) review (usually 1-2 months) and a review by the Office of Public School 
Construction (OPSC) review (72-3 months). Tne District is also required to plan the 
she development or improvement m advance of these reviews. Tnis process, 
depending on the scop; of the project, takes from 12-11 months. 

During this process, the Disrrict retains the services of a professional architect and all 
of the engineering trades (electrical, mechanical, gee-technical and structural) tc 
complete the project plans and specifications. Tne District pays for all of these 
services and the dssien review as they are completed and in advance of State 
approval and funding and bidding approval. V> "hen this process is finished and the 
project is piaced oat to bid, the District awards and funds the compierjon of the 
project through a general contractor. Tne typical construction project runs 12-11 
months. Considering the above informaTion, the District had planned and prepared for 
bid a number of projects that were included within the bond proposal. When the 
bond passed, these nrojeets were piaeec out to bid and awarded-to general contractors 
for construction. Tnese protects are currently under construction. 

As you know, the District intends tt> utilize bond proceeds, bond interest earning*. 
and all of its other sources of revenue To build facilities, modernize facilities, 
augment existing facilities, and complete seismic and technology infrastructure 
improvements throughout the City and County of Sar. Francisco. Since the passage 
of the Proposition A on June 3. 1997, the District has proceeded with the planning, 
review and project application process with the State for seventeen (IT) District sites. 
Tnese 17 projects are shared funding projects, meaning that the State will fund 80% 
(eighty) of the imnrovement project and the Disrrict will fund 20% Tne torai vaiuc 
of the im p r ovement work to be completed on the 17 sites is S J 9.6~L.466.00. The 
State's 80% share amounts to S39.713.972..80 wtth the District's portion cquajinc 
S9.928.493.20. Tne District was anticipating the uaiizarior, of the iaa e si caminns 
from the bond proceeds and other source funds to meet hs commitment on these 
projects. Without the use of these interest earnings from th: bond proceeds the 
District will be unabie id Drocccc with the deveiooment of these projects. 



fB/20-d i==S S= 9 S:p 32 aNIWtfTd/SLLnnHd 031=3 2S:rt £ ^-_ c -__-=r 



--- — 5-cm?.e r: t 1 '. 
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SeDtemoerlO, 199 s 



Addinonally, State fund grams are limited in both the amount and the duration of 
avaiiabiiity. If the District had been unable to proceed with the development of these 
projects by Fsbrua.-y 199S, it was iikeiy that the District would have lost the State's 
commitment to fund its 80% share ofS39.7':3,972.80. 



Thanks 
Tim Tronson 



MV23'd i9?S S=9 SIP 



33 DNISJvfcTrf-'Srlin'D^d C3T^S 



:»1 &£5T-S:-£=5 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 

Item 3 - File 99-1852 

Note: This item was continued by the Finance and Labor Committee at its meeting 
of October 20, 1999. 



Department: 
Item: 



Location: 

Purposes of Lease 
Modifications: 



Airport Commission 

Resolution approving modifications to the Airline/Airport 
Lease and Use Agreements between the City and eight 
airlines to allow these airlines to relocate their 
international flight operations to the new International 
Terminal Building at the San Francisco International 
Airport. 

New International Terminal Building (ITB) at the Airport 

The proposed resolution would modify the existing Lease 
and Use Agreements with the eight airlines listed below. 
The existing Lease and Use Agreements were approved 
by the Board of Supervisors in 1981. The lease 
modifications would permit the Airport to: 

(a) relocate the eight airlines' international flight 
operations to the new ITB from the current 
International Terminal, which will then be converted 
for domestic flights. The current International 
Terminal is referred to in this report as the Central 
Terminal Building (CTB); 

(b) change certain types of airline rental space from 
exclusive use to joint use; 

(c) employ procedures for reducing, relocating, and/or 
reallocating exclusive use space in certain 
circumstances; 

(d) preserve the rights of the eight airlines with Lease and 
Use Agreements to exclusive use space approximately 
equal to the exclusive use space they will be 
relinquishing in the CTB when they move to the new 
ITB; 

(e) terminate a lease if an airline voluntarily ceases its 
international flight operations at the Airport, 
contingent on Board of Supervisors approval of such 
lease terminations; and 

(f) permit United Airlines to lease increased exclusive use 
space in the North Terminal Building. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



34 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of tbe Finance and Labor Committee 

Lessor: City and County of San Francisco by and through the 

Airport Commission. 

Lessees: Alaska Airlines 

China Airlines 
Japan Airlines Co., LTD 
Mexicana Airlines 
Northwest Airlines 
Philippine Airlines, Inc. 
Singapore Airlines 
United Airlines 

Square Footage: There are three sets of space being leased: (1) 676,260 

square feet of joint use space in the new ITB, (2) 93,594 
square feet of exclusive use space in the new ITB, and (3) 
451,492 square feet of United Airlines' exclusive use space 
in the North Terminal Building. 

(1) Joint use space in the new ITB: According to Ms. 
Dorothy Schimke of the Airport, "joint use space" is 
airline rental space in a facility owned by the Airport 
which is leased to more than one airline for the shared 
use of all the airlines leasing that space. In the new ITB, 
26 airlines will collectively lease 676.260 square feet of 
joint use space. These 26 airlines comprise (a) the eight 
airlines listed above, and (b) 18 other airlines. The 
Airport's proposal to enter into Lease and Operating 
Agreements with those 18 other airlines is the subject of a 
separate resolution (see Item 9, File 99-1853, of this 
report to the Finance and Labor Committee). 

The 26 airlines will pay rent for this 676.260 square feet 
of joint use space in accordance with Airport rates and 
charges, as set out in the Lease and Use Agreements. 
This joint use space is divided into the rental categories 
shown in Attachment I. provided by the Airport. 

Attachment I shows (a) an estimated 548.691 square foot, 
or approximately 430 percent, increase in the joint use 
space to be leased by the 26 airlines, from the current 
127,569 square feet of joint use space in the CTB to the 
676,260 square feet of joint use space in the new ITB. and 
(b) an estimated $18,946,802. or approximately 17S 
percent, increase in the rent to be paid by those 26 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

35 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 



airlines, from an estimated $10,627,232 in FY 1999-2000 
to an estimated 229,574,034 in FY 2000-2001. 

As Alaska Airlines will only use the new ITB for 
international arrivals from Mexico, it will be a joint use 
space lessee for 360,818 square feet of the total 676,260 
square feet of joint use space. Therefore Alaska Airlines 
will be a joint use lessee for just the baggage claim, 
Federal Inspection Service, and inbound baggage 
unloading areas, and any other joint use spaces directly 
related to international arrivals. The amount of 360,818 
square feet represents approximately 53.4 percent of the 
total joint use space available. 

(2) Exclusive use space in the new ITB: Exclusive 
use space in the new ITB can consist of (a) airline ticket, 
baggage service, ramp operations, and administrative 
offices, (b) VIP clubrooms, and/or (c) other support space. 
The eight airlines will rent the amounts of exclusive use 
space in the new ITB as set forth in Attachment II, 
provided by the Airport. Attachment II shows (a) an 
estimated 24,048 square foot, or approximately 34.6 
percent, increase in the exclusive use space to be leased 
by the eight airlines, from the current 69,546 square feet 
of exclusive use space in the CTB to the 93,594 square 
feet of exclusive use space in the new ITB, and (b) an 
estimated 5895,233, or approximately 16 percent, 
decrease in the rent to be paid by those eight airlines for 
their exclusive use space, from an estimated $5,600,856 in 
FY 1999-2000 to an estimated $4,705,623 in FY 2000- 
2001. According to Ms. Schimke, the rental rates are 
calculated on a cost recovery basis, as prescribed in the 
Lease and Use Agreement and explained in Attachment 
VI. 

(3) United Airlines exclusive use space in the North 
Terminal Building: The modification to United 
Airlines' Lease and Use Agreement will also cover an 
increase of 116.939 square feet, or approximately 35 
percent, in the exclusive use space leased by United 
Airlines in the North Terminal Building, from 334.553 
square feet to 451,492 square feet. This 35 percent 
increase in exclusive use space is to provide adequate 
space for United Airlines' new automated baggage system 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

36 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 

for its domestic flight operations at the North Terminal 
Building (see Comment No. 8 below). The additional 
space is primarily Category IV baggage handling areas 
which United Airlines has taken over incrementally as it 
installed its new baggage system. According to Ms. 
Schimke, the Airport will be billing United Airlines for 
this additional space retroactively to July of 1999. As a 
result of this additional United Airlines rental space in 
the North Terminal Building, the Airport expects to 
realize from United Airlines additional rental revenue of 
$3,994,608 in FY 1999-2000, and $2,365,967 in FY 2000- 
2001. 

Annual Airline 

Lease Revenue: The Airport estimates that it will realize $37,161,803 in 

airline lease revenue in FY 2000-2001 from the new ITB's 
total airline rental space from all of the 26 airlines. Of 
this amount, the Airport will realize an estimated 
$29,574,034, or approximately 79.6 percent, from the 
676,260 square feet of joint use space leased to all 26 
airlines with international flight operations, as shown in 
Attachment I. Of the estimated balance of $7,587,769, or 
approximately 20.4 percent, which the Airport estimates 
that it will realize from rental of exclusive use space, an 
estimated $4,705,623 will be paid by the eight airlines 
with Lease and Use Agreements (as shown in Attachment 
II), and an estimated $2,882,146 will be paid by the 18 
airlines with Lease and Operating Agreements (as shown 
in Attachment II of Item 9, File 99-1853, in this report to 
the Finance and Labor Committee). 

The table below compares the estimated FY 2000-2001 
airline lease revenues from the new ITB with the 
estimated airline lease revenues from the CTB in FY 
1999-2000. Overall, the Airport anticipates a 

$19,082,405, or 106 percent, increase in airline lease 
revenues in FY 2000-2001 from the 26 airlines which 
have international flight operations at the Airport. (This 
table covers Items 8 and 9, Files 99-1852 and 99-1853, of 
this report to the Finance and Labor Committee.) 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 





CTB 

Square 

Feet 


Estimated 

ITB 

Square 

Feet 


Estimated % 
Difference in 
Square Feet 


Estimated 
FY 1999- 

2000 Lease 
Revenue 


Estimated 
FY 2000- 

2001 Lease 
Revenue 


Estimated % 

Difference in 

Lease 

Revenue 


Joint Use Space 


127,569 


676.260 




430.0% 


510,627,232 


529,574,034 


178% 


Lease & Use 
Agreement 
Exclusive Use 
Space 


69,546 


93,594 




35% 


5,600,856 


4,705,623 


(16%) 


Lease & 
Operating 
Agreement 
Exclusive Use 
Space 

TOTAL 


21,284 


55,126 




159% 
278% 


1,851,310 


2,882,146 


56% 
106% 


218,399 


824,980 


$18,079,398 


$37,161,803 



The Airport also expects, as a result of the increase in the 
United Airlines exclusive use space in the North Terminal 
Building, to realize an additional $3,994,608 in airline 
lease revenue in FY 1999-2000, and $2,365,967 in FY 
2000-2001 from United Airlines. 



Approval of both Files 99-1852 and 99-1853 will result in 
total estimated airline lease revenues for the Airport of 
$37,161,803 from the new ITB in FY 2000-2001. This 
represents an estimated increase of $19,082,405 over the 
estimated airline lease revenues for the Airport of 
$18,079,398 from the CTB in FY 1999-2000. This 
increase comprises the estimated additional (a) 
$18,946,802 for joint use space in the new ITB, and (b) 
$1,030,836 for Lease and Operating Agreement airlines' 
exclusive use space in the new ITB (as described in Item 
9, File 99-1853 of this report to the Finance and Labor 
Committee), offset b}' (c) a decrease of $895,233 in the 
revenues from Lease and Use Agreement airlines' 
exclusive use space in the new ITB. Furthermore, 
approval of File 99-1852 will result in additional airline 
lease revenue for the Airport of an estimated $2,365,967 
in FY 2000-2001 from United Airlines' increased exclusive 
use space in the North Terminal Building. The Airport 
therefore estimates that it will receive additional airline 
lease revenues in the amount of $21,448,372 in FY 2000- 
2001. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



38 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 



Term of 
Modified Leases: 



Right of Renewal: 



Each of the proposed modifications to the Lease and Use 
Agreements between the City and the eight airline.- will 
take effect upon full execution by the parties and final 
approval by the Board of Supervisors. All eight Lease and 
Use Agreements terminate on June 30, 2011. 

None. 



Maintenance and 
Operations: 



Comments: 



The respective responsibilities of the City and the eight 
airlines for maintenance and operations are contained in 
Attachment IV, provided by the Airport. Ms. Schimke 
states that the Airport's airline rental space rates are 
designed to cover all of the Airport's maintenance and 
operations overhead costs which are not covered by 
revenue from the Airport's concessions or other non- 
airline revenues. 

1. As part of the Airport's Master Plan Expansion 
Program, the Airport is constructing a new ITB which is 
scheduled for completion in May of 2000. All 
international flight operations currently conducted by the 
26 airlines in the CTB, including those of the eight 
airlines under this subject resolution, will be relocated to 
the new ITB, allowing the CTB to be used as a third 
domestic terminal, according to Mr. Gary Franzella of the 
Airport. Mr. Franzella states that the reassignment of 
the CTB as a third terminal for domestic flight operations 
and the opening of the new ITB as a fourth terminal will 
enable the Airport to increase the total number of 
passengers that the Airport can handle from an estimated 
40 milli on in 1999, to an estimated 51 million in 2006, an 
increase of 27.5 percent. 

2. Of the 26 airlines which will relocate their 
international flight operations to the new ITB, eight 
airlines, which are the subject of this resolution, have 
existing Lease and Use Agreements, effective July 1, 
1981. These Lease and Use Agreements were previously 
approved by the Board of Supervisors. They are due to 
expire on June 30, 2011. Proposed modifications to these 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



39 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 



eight Lease and Use Agreements are the subject of this 
resolution. 

3. Of the 26 airlines which will relocate their 
international flight operations to the new ITB, 18 airlines 
are the subject of Item 9, File 99-1853, of this October 13 
report to the Finance and Labor Committee. 

4. According to Mr. Franzella, in negotiating the 
proposed modifications to the Lease and Use Agreements, 
the Airport had the following objectives: 

(a) To relocate the eight airlines' international flight 
operations from the CTB to the new ITB; 

(b) To apply a joint use approach to as much space in the 
new ITB as possible, to maintain flexibility to address 
changes in the airline industry and accommodate 
increased international traffic demands; 

(c) To provide a mechanism for reducing, relocating, 
and/or reallocating exclusive use space, as described in 
Attachment III, provided by the Airport; 

(d) To preserve the rights of the eight airlines with Lease 
and Use Agreements to exclusive use space 
approximately equal to the exclusive use space they 
will be relinquishing in the CTB when they move to 
the new ITB. The replacement exclusive use space 
will be designated as "Entitlement Space" which may 
only be reduced or relocated through mutual 
agreement or the Airport's Right of Reaccess, as 
described in Attachment III; 

(e) To designate any exclusive use space under an 
airline's Lease and Use Agreement that is in excess of 
(i) the exclusive use space relinquished by that airline 
in the CTB, and (ii) VIP clubroom space, as "Non- 
Entitlement Space", which could be reduced, relocated, 
and/or reallocated in accordance with the reallocation 
procedures described in Attachment III; 

(f) To be able to terminate an airline's lease if the lessee 
voluntarily ceases international flight operations at 
the Airport, contingent on Board of Supervisors 
approval of such lease terminations; and 

(g) To permit United Airlines to make changes to its 
exclusive use space in the North Terminal Building to 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 



accommodate expansion and modernization of its 
baggage system and other operating space. 

5. Under the proposed resolution, the Airport would be 
authorized to modify the allocation of exclusive use space 
in the new ITB without further approval from the Board 
of Supervisors, as long as the modifications are consistent 
with the provisions contained in Attachment III. All 
other modifications to airlines' allocations of exclusive use 
space would require Board of Supervisors approval. 

6. Under the existing Lease and Use Agreements with 
the subject eight airlines, joint use space includes only 
gate hold-rooms, baggage handling and baggage claim 
areas, and Federal Inspection Service areas. The joint 
use space approach is being expanded in the new ITB. 
According to Mr. Franzella, all of the new ITB's 168 ticket 
counters will be designated as joint use spaces, compared 
with only eight of the 111 ticket counters currently 
designated as joint use space in the CTB. The remaining 
103 CTB ticket counters are exclusive use spaces under 
the existing Lease and Use Agreements. Mr. Franzella 
also states that all 24 gate hold-rooms in the new ITB will 
be designated as joint use spaces, whereas in the CTB 
United Airlines has exclusive use space rights over five of 
the CTB's ten gate hold-rooms. 

7. As explained in Attachment V, provided by the 
Airport, scheduling of joint use space in the new ITB will 
be managed, under the Airport's oversight, by SFO 
Terminal Equipment Company, LLC (SFOTEC), a 
company to be formed by the 26 airlines. 

8. United Airlines' Lease and L'se Agreement also 
provides for a modification in relation to United Airlines' 
leasing of exclusive use space in the North Terminal 
Buuding space. This is primarily the result of L'mted 
Airlines' installation of a new automated baggage system 
under certain North Terminal Building gates, in spaces 
that had not been previously leased to any airline. The 
space is now primarily designated as Category IV baggage 
handling areas. As a result of this additional United 
Airlines rental space in the North Terminal Building, the 
Airport expects to realize from United Airlines an 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



41 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 



additional $3,994,608 in airline lease revenues in FY 
1999-2000, and $2,365,967 in FY 2000-2001. 

9. Execution copies of the proposed modifications to the 
Lease and Use Agreements were sent to the airlines on 
September 2, 1999. Final approval is contingent on the 
Human Rights Commission's determination of each 
airline's compliance with, or exemption from, the 
requirements of San Francisco's Equal Benefits 
Ordinance. Ms. Schimke advises that all eight airlines 
are currently in various stages of obtaining certification of 
their compliance with, or exemption from, that 
ordinance's requirements, and that the Airport 
anticipates that all eight will comply . 

10. According to Mr. Franzella, a phased occupancy of 
the subject space is commencing on November 1, 1999 at 
which time United Airlines will be able to begin tenant 
improvements of its exclusive use spaces in the new ITB. 
All the other airlines which have exclusive use spaces will 
be able to commence their tenant improvements no later 
than January 1, 2000. As previously noted, the new ITB 
is scheduled to open in May of 2000. While the lessees 
are not required to make a minimum investment per 
square foot in the tenant improvement construction of 
their exclusive use spaces, they are required to meet the 
requirements of the relevant construction codes. 
Northwest Airlines and United Airlines will construct 
their own tenant improvements. China Airlines and 
Singapore Airlines will construct their VIP clubrooms. All 
other tenant improvements for Lease and Use Agreement 
airlines will be performed under a consolidated contract 
awarded by the Airport's Airline Liaison Office in order to 
minimize potential coordination problems. Construction 
of all joint use space will be the responsibility of the 
Airport. 

11. The airlines' pa3 T ment of rents for the new ITB space 
will commence on the date the new ITB is open and 
operational, as determined bj r the Airport Director. On 
that date, the airlines' rental payments for the CTB cease. 
Under the proposed modifications to their Lease and Use 
Agreements, the eight airlines will have up to 90 days 
after they begin paying rent for their new ITB space to 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



42 



Memo to the Finance and Labor Committee 

November 3, 1999 Meeting of the Finance and Labor Committee 

remove their equipment from their exclusive use space in 
the CTB. 

12. All lessees will pay rent for their new ITB space in 
accordance with the Airport's rates and charges for airline 
rental space. These are determined annually by the 
Airport using the rates and charges methodology 
prescribed in the Lease and Use Agreements, as 
previously approved by the Board of Supervisors, and 
contained in Attachment VI, provided by the Airport. The 
division between the airlines of the rent payable for the 
new ITB's joint use space will be determined on the basis 
of a "Joint Use Formula" as explained in Attachment MI. 
provided by the Airport. 

13. In summary, the Airport estimates that approval of 
both Files 99-1852 and 99-1853 will result in total 
estimated airline lease revenues for the Airport of 
$37,161,803 from the new ITB in FY 2000-2001, an 
increase of $19,082,405 over the estimated airline lease 
revenues for the Airport of $18,079,398 from the CTB in 
FY 1999-2000. Furthermore, approval of File 99-1852 
will result in additional airline lease revenue for the 
Airport of an estimated $2,365,967 in FY 2000-2001 from 
United Airlines' increased exclusive use space in the 
North Terminal Building. The Airport therefore 
estimates that it will receive additional airline lease 
revenues in the amount of $21,448,372 in FY 2000-2001. 

Recommendation: Approve the proposed resolution, contingent on the 

airlines' compliance with the City's Equal Benefits 
Ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

43 



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GATEWAT TO THE fAClFIC 

REDUCTION. RELOCATON. AND/OR REALLOCATION 
OF EXCLUSIVE USE SPACE 



When required by a significant shift in market share or to accommodate a new 
airline, ihe Airport can reduce, relocate, and/or reallocate exclusive use space in 
accordance with the procedures described below. 

B . Airline Ticket Office (ATO) Procedures 

• ATOs arc the ticket counter support offices located on Floors 3 and 3M of the 
newITB. 

• ATO space may be reduced, relocated, and/or reallocated in conjunction with 
reallocation of ticket counter preferential use assignments, which are decided 
by SFOTEC, with Airport oversight, based on flight activity and new TTB 
Ticket Counter Management Protocols. 

• A key objective of the new ITB Ticket Counter Management Protocols is to 
provide each airline with a regular check-in location, with the maximum 
number of positions desired (if available). 

• Reduction, relocation, and/or reallocation of ATO space held by airlines under 
Lease and Use Agreements will occur only after the City has determined that 
(1) there is no unassigned ATO space on Floors 3 or 3M, (2) there is no ATO 
space that may be recovered for reassignment from airiines with space permits, 
(3) there is no ATO space that may be recovered for reassignment from airlines 
with Lease and Operating Agreements, and (4) the reduction, relocation, and/or 
reallocation of leased ATO space will not reduce any affected Lease and Use 
Agreement lessee's space below a minimum operating unit 

C. Airport's Right of Rcacccss to Entitlement Space 

• "Enutlement Space" refers to (a) that portion of new ITB exclusive use space 
which is approximately the size of an airline's existing exclusive use space in 
the CTB under a Lease and Use Agreement, except that VIP clubrooms are 
entirely enutlement space, whether they are larger than CTB VTP areas or not. 

• Tne Airport may recover Entitlement Space through Right of Reaccess only 
when the relevant lessee's available international seats have decreased by more 
than 50 percent in a 12-month period versus the benchmark year of FY 1999- 
2000. 

• Tne Airport may reaccess square footage in each exclusive use space category 
up to the percentage reduction, subject to minimum operating requirements. 

SAN SIANCISCO INTERNATIONAL AIRPORT . P.O. BOX KS7 ■ SAN FRANCISCO CAUFORNIA 9*13 . TtLrPHONE (6501 794-5000- FAX IBS! 794-5005 



46 



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:a DEPARTMENT Or AVIATION KAKAGEKEXT IWZDIsO 6" 99 10 '/-. ST. 1( : •: 

Attachmem 



Page 2 



?ase 2 c f 2 



• All VIP ciubroom soaee held by the sight airiines is designated as Entitlement 
Space because of the cost of constructing VTP clubrooms. Such space requires 
180 d2ys notice to recover. All other Entitlement Space requires 90 days notice 
to recover. 

Procedures for Non-Entitlement Space 

• "Non-Entitlement Space" refers to all exclusive use space that is not 
"Entitlement Space". 

• To reduce or relocate Non-Entitlement Space, the Airport shall develop and 
present a plan and accompanying rationale to SFOTEC and the impacted 
airline(s). .Airlines have a 30 day period 

• At the end of the 30 day comment period, the .Airport shall deliver a notice to 
the airline(s) required to reduce or relocate space in accordance with the plan, 
noting that the plan may have been modified during the review process. 

• Non-Entitlement Space requires 90 days notice to recover. 

Buyout Provisions 

• When pursuant to these provisions, reduction or relocation of both Entitlement 
and Non -Entitlement Space is subject to buyout by the Airport of the value of 
the improvements amortized on a straight-line basis over the remaining term of 
the Lease and Use Agreement. If, however, exclusive use space is voluntarily 
surrendered by an airline, then the Airport is not obligated to offer buyout 
compensation. 



47 



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AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Alan Gibson DATE: October 6, 1999 



FROM: ^-f^) Dorothy Schimke, Senior Property Manager 

Department of Aviation Management 



SFO Terminal Equipment Company. LLC 



The airlines that will operate at the new International Terminal Building (TTB) are forming a 
limited liability company, SFO Terminal Equipment Company, LLC (SFOTEC). The purpose of 
this company is to operate and mainiain certain equipment and joint use space in the TTB and to 
schedule the usage of such joint use equipment and space among airline members and non- 
member users. 



(1) Operation and Maintenance of Equipment 

Maintenance of certain operating equipment and systems owned by the Airport will be the 
responsibility of SFOTEC. This equipment includes but is not limited to passenger " 
bridges, the baggage system, the precondiuoned air system, the 400 rlz ground power system, 
flight and baggage information display systems and common use telephones at gate podjums and 
ticket counters. 



(2) Gate and Ticket Counter Scheduline 

Gate scheduling: The scheduling of the new LTB's 24 joint use gates will be managed by 
SFOTEC, subject to Airport approval, to rnaxiroizc the efficient use of those gates. 
Determination of gate usage policy and final resolution of conflicts will rest solely with the 
Airport Director. 

Ticket counter assignment and management: Tne assignment of the new ITB's 16S join; use 
ticket counters will be managed by SFOTEC, subject to Airport approval, in accordance with 
Ticket Counter Management Protocols designed to maximize the efficient use of those ticket 
counters. Detcrminauon of ticket counter usage poiicy and final resolution of conflicts will rest 
solely with the Airport Director. 



k9 



)N va:;agzm:n: 



AJaa Gibson 
October^, 1999 



i'flf:02 N 



Atta c'n in en ~ V 
?£je 2 of 2 



(3) 



Management Services 



Tower operations: The ground movement of aircraft into and out of the new ITB, and within 
non-movement zones designated by the Airport, will be managed by SFOTEC. 

Cleaning and Maintenance: SFOTEC wiD also manage janitorial services for non-public joint 
use areas, and ramp sweeping. 

Accounting: SFOTEC will be responsible for allocating costs and distributing billings among 
the airline members and non-member users. 



(4) C oordin ation and Oversight 

An Oversight Committee, chaired by the Airport and including both airline and Airport 
representation, will be responsible for setting SFOTEC s missions, addressing issues of mutual 
concern to the Airport and the airlines, and reviewing SFOTEC s performance. 



50 



M H : :a DEPASTMEJiT : : AVIATION HANAG3EM ITS - 7 : 00/ST 7:0? KC - : 2 



.:-.£ = hr.e-: V: 
; a~e 1 of 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 
CITY .AND COUNTY OF SAN" FRANCISCO 

MEMORANDUM 



TO: AJan Gibson DATE: October 6, 1999 

FROM: Dorothv Schimkc 



Airport Rates and Charges 



Background 



In 1979 a number of airlines filed suit lo iitigiite certain complaints against the City, 
including an allegation that Airport revenues were being uniawfuDy divencd to the City's 
General Fund. (Federal law prohibits the expenditure of airport revenues for non-airport 
purposes.) In early 1980 the City and the amines that were parties to the suit entered into 
settlement negotiations that resulted in a detailed Settlement Agreement and an Ailiine- 
Airport Lease and Use Agreement ("the LU"). Provisions for a substantial restructuring 
of the financial operation of the .Airport, including the methodology for calculating 
Airport Rates and Charges, were incorporated into the LU as part of the Scttlcrr.cr.: 
Agreement. 

Calculation of Rates and Charges 

In general, the airhncs are obii gated to pay terminal building rental rates and landing fees 
in amounts dial, when included with all other Airport revenues, will be sufficient to cover 
all annual Airport costs. Rates are adjusted annually. Terminal rate adjustments are 
based on the average cost per square foot of providing, maintaining and operating the 
terminal building areas. 

A simplified outline of the methoooiosry for calculating Airport terminal rents is as 
follows: 

1. Expense Forecasting. Airoort forecasts its expenses, including both operating ar.c 
capital expenses, for the upcoming fiscal year. 

2. Revenue Forecasting. Airport forecasts its non-airiine terminal revenues for the 
upcoming fiscal year. 

• Concession revenues 

• Rents from non-airiine tenants 

• Other revenues (e.s., interest on unexpended capital funds) 



51 



:'/ ' : _ ' "V "SVAt-V-NT 






I n - 1 



Alan i_ribson 
October 6. 1999 



Annual Service Payment. 15% of Concession revenues goes to City's general fund 

as compensation for indirect services to the Airport. 

Calculation. 

• Non-airiine revenues (net of Annual Service Payment) are set off against 
projected expenses. 

• Remainder (expenses that are not covered by non-airiine revenues) is divided by 
the total square feet of terminal space rented by airiines to determine avcrase rent 
per square foot, which is then apportioned into five rate categories. 

• The higher the number of sauarc feci rented to airlines, the lower the effective 
rental rate reauired to recover the terminal costs. 



52 



:a department o= aviation UAKAGEMEXT ITUE! 



a a 



ts/ST :c r '■ 



Ajrpon 

Citv and County 
tf Sar. Franeiscs 

Willte L browr, J; 



Henry £ Bbnr.ar 

Lbitv Ms^oij 
Vice President 

Mieh»«i S Sirunsitv 
Unai S Crgyun 

CilW, llfi 




Attachment VII 



San Francisco International Airport 



GATEWAY TO THE PfcOnC 

JOINT USE FORMULA FOR THE NEW ITP, 



The total cnarees for each room comDnsins lomt use space shall o= divided amone the 

JOHN L MARTIN • , ~, __ ,7 in £ i 

A.roon n.rccio' amines using trie new ITB according to the following formula: 

• Twenty percent of each joint space shall be divided equally among all airlines using 
thai joint use space. Since Alaska Airlines will use only 53.4 percent of the joint 
use spaces, it will pay l/26 tt of the 20 percent payment for those spaces. For all 
other joint use spaces, the remaining 25 airlines will pay 1/25 each. These 
proportions will change as individual airlines Stan or cease international flight 
operations at the new IT3. 

• Eighty percent shall be divided as follows. Each airline using the joint use space 
pays that proporuon which the number of its passengers enplaning and/or deplaning 
at the new ITB bears to the total number of passengers enplaning and/or deplaning 
at the new ITB. Tne proportions for each type of joint use space are calculated on 
the following bases: 



Catesorv 


Tvne of SDace 


Tvoe of Passenger 


I 


Ticket counter/gate 
holdroom 


new ITB enplaned passengers 


n 


Baggage claim /Federal 
Lnsoecuon Service 


new ITB depianed passengers 


n 


Other 3 rc Door and 
above, and l" floor 
Dassenecr access 


new ITB total enplaned and 
deplaned passengers 


in 


Other enclosed, 2 1 * and 
below 


new ITB total enplaned and 
deplaned nassensers 


rv 


Inbound bageage 
handlinc 


new ITB deplaned passengers 


rv 


Outbound baggage 
handling 


new ITB enpianed passengers 


V 


Other unenclosed 


new ITB tola! enplaned and 
deplaned Dassenqers 



• If for any reason the number of passengers enplaning and/or deplaning ai the new 
ITB in the prior fiscal year for any of the airlines using the joint use snace 
constitute an inappropriate basis for forecasting that airiinc's passenger volume for 
the year in which the charges are levied, the City can make appropriate adiustments 
in order to equitably apportion the total costs among all of the airlines using such 
joint use space. 

SAN FRANCISCO INT31NATI0NAL AIBPORT . PC BOX SOT ■ SAN FRANCISCO CALIFORNIA ii\2t ■ TELEPHONE I6a0l 7W-SGX ■ FAX (B50: 79*-SXS 



53 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Item 4 - File 99-1853 

Note: This item was continued by the Finance and Labor Committee at its meeting 
of October 20, 1999. 



Department: 
Item: 



Location: 
Purpose of Leases: 



Lessor: 



Lessees: 



Airport Commission 

Resolution approving the terms of new Lease and 
Operating Agreements between the City and 18 airlines 
to allow these airlines to relocate their international flight 
operations to the new International Terminal Building at 
the San Francisco International Airport. 

New International Terminal Building (ITB) at the Airport 

The proposed new Lease and Operating Agreements with 
the 18 airlines listed below would permit the Airport to: 

(a) relocate the 18 airlines' international flight operations 
to the new ITB from the current International 
Terminal, which will then be converted for domestic 
flights. The current International Terminal is referred 
to in this report as the Central Terminal Building 
(CTB); 

(b) change certain types of airline rental space from 
exclusive use to joint use; 

(c) employ procedures for reducing, relocating, and/or 
reallocating exclusive use space in certain 
circumstances; and 

(d) terminate a lease if an airline voluntarily ceases its 
international flight operations at the Airport, 
contingent on Board of Supervisors approval of such 
lease terminations. 

City and County of San Francisco by and through the 
Airport Commission. 

Aeroflot Russian International Airlines 

Air China 

Air France 

Alitalia Airlines 

Asiana Airlines 

All Nippon Airways 

British Airways, PLC 

Cathay Pacific Airways, LTD. 

China Eastern Airlines 

EVA Airways 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



54 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Finnair 

Korean Air 

KLM Pcoyal Dutch Airlines 

Lineas Areas Costarricenses (LACSA), S.A. 

Lufthansa German Airlines 

Ryan International Airlines 

Swissair Transport Co. LTD 

Virgin Atlantic Airways 

Square Footage: There are two sets of space being leased in the new ITB: 

(1) 676,260 square feet of joint use space, and (2) 55,126 
square feet of exclusive use space. 

(1) Joint use space in the new ITB: According to Ms. 
Dorothy Schimke of the Airport, "joint use space" is 
airline rental space in a facility owned by the Airport 
which is leased to more than one airline for the shared 
use of all the airlines leasing that space. In the new ITB, 
26 airlines will collectively lease 676,260 square feet of 
joint use space. These 26 airlines comprise (a) the 18 
airlines listed above, and (b) eight other airlines which 
operate under Lease and Use Agreements effective July 1, 
1981. The Airport's proposal to modify its existing Lease 
and Use Agreements with those eight other airlines is the 
subject of a separate resolution (see Item 8, File 99-1852, 
of this report to the Finance and Labor Committee). 

The 26 airlines will pay rent for this 676.260 square feet 
of joint use space in accordance with Airport rates and 
charges, as set out in the Lease and Operating 
Agreements. This joint use space is divided into the 
rental categories shown in Attachment I, provided by the 
Airport. 

Attachment I shows (a) an estimated 548.691 square foot, 
or approximately 430 percent, increase in the joint use 
space to be leased by the 26 airlines, from the current 
127,569 square feet of joint use space in the CTB to the 
676.260 square feet of joint use space in the new ITB. and 
(b) an estimated $18,946,802, or approximately 178 
percent, increase in the rent to be paid by those 26 
airlines, from an estimated $10,627,232 in FY 1999-2000 
to an estimated $29,574,034 in FY 2000-2001. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

' 55 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

(2) Exclusive use space in the new ITB: Exclusive 
use space in the new ITB can consist of (a) airline ticket, 
baggage service, ramp operations, and administrative 
offices, (b) VIP clubrooms, and/or (c) other support space. 
The 18 airlines will lease the amounts of exclusive use 
space in the new ITB as set forth in Attachment II, 
provided by the Airport. Attachment II shows (a) an 
estimated 33,842 square foot, or approximately 159 
percent, increase in the exclusive use space to be rented 
by the 18 airlines, from the current 21,284 square feet of 
exclusive use space in the CTB to the 55,126 square feet 
of exclusive use space in the new ITB, and (b) an 
estimated $1,030,836, or approximately 56 percent, 
increase in the rent to be paid by those 18 airlines for 
their exclusive use space, from an estimated $1,851,310 in 
FY 1999-2000 to an estimated $2,882,146 in FY 2000- 
2001. 

Annual Rental 

Revenue: The Airport estimates that it will realize $37,161,803 in 

airline lease revenue in FY 2000-2001 from the new ITB's 
total airline rental space. Of this amount, the Airport will 
realize an estimated $29,574,034, or approximately 79.6 
percent, from the 676,260 square feet of joint use space 
leased to all 26 airlines with international flight 
operations, as shown in Attachment I. Of the estimated 
balance of $7,587,769, or approximately 20.4 percent, 
which the Airport estimates that it will collect from rental 
of exclusive use space, an estimated $2,882,146 wiD be 
paid by the 18 airlines with Lease and Operating 
Agreements (as shown in Attachment II), and an 
estimated $4,705,623 will be paid by the eight airlines 
with Lease and Use Agreements (as shown in Attachment 
II of Item 8, File 99-1852, in this report to the Finance 
and Labor Committee). 

The table below compares the estimated FY 2000-2001 
airline lease revenues from the new ITB with the 
estimated airline lease revenues from the CTB in FY 
1999-2000. Overall, the Airport anticipates a 

$19,082,405, or 106 percent, increase in airline lease 
revenues from the 26 airlines which have international 
flight operations at the Airport. (This table covers Items 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

56 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



8 and 9, Files 99-1852 and 99-1853, of this report to the 
Finance and Labor Committee.) 





CTB 

Square 

Feet 


Estimated 

ITB 

Square 

Feet 


Estimated % 
Difference in 
Sauare Feet 


Estimated 
FY 1999- 

2000 Lease 
Revenue 


Estimated 
FY 2000- 

2001 Lease 
Revenue 


Estimated % 

Difference in 

Lease 

Revenue 


Joint Use Space 


127,569 


676.260 




430.0% 


S10.627.232 


S29.574.034 


178% 


Lease & Use 
Agreement 
Exclusive Use 
Space 


69,546 


93.594 




35% 


5,600,856 


4.705.623 


(16%) 


Lease & 
Operating 
Agreement 
Exclusive Use 
Space 

TOTAL 


21,284 


55.126 




159% 
278% 


1,851.310 


2.882.146 


56% 
106% 


218.399 


824,980 


$18,079,398 


$37,161,803 



Term of Lease 
and Operating 
Agreements: 



Approval of both Files 99-1852 and 99-1853 will result in 
total estimated airline lease revenues for the Airport of 
$37,161,803 from the new ITB in FY 2000-2001. This 
represents an estimated increase of S 19.082.405 over the 
estimated airline lease revenues for the Airport of 
$18,079,398 from the CTB in FY 1999-2000. This 
increase comprises the estimated additional (a) 
$18,946,802 for joint use space in the new ITB, and (b) 
$1,030,836 for Lease and Operating Agreement airlines' 
exclusive use space in the new ITB, offset by (c) a 
decrease of $895,233 in the revenues from Lease and Use 
Agreement airlines' exclusive use space in the new ITB 
(as described in Item 8, File 99-1852, of this report to the 
Finance and Labor Committee). 



Each of the proposed Lease and Operating Agreements 
will take effect upon full execution by the parties and 
final approval by the Board of Supervisors. All 18 Lease 
and Operating Agreements terminate on June 30, 2011, 
which is coterminous with the eight Lease and Use 
Agreements which are the subject of Item 8, File 99-1S52, 
of this report to the Finance and Labor Committee. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



57 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Right of Renewal: 



None. 



Maintenance and 
Operations: 



The respective responsibilities of the City and the 18 
airlines for maintenance and operations are contained in 
Attachment IV, provided by the Airport. Ms. Schimke 
states that the Airport's airline rental space rates are 
designed to cover all of the Airport's maintenance and 
operations overhead costs which are not covered by 
revenue from the Airport's concessions or other non- 
airline revenues. 



Comments: 



1. As part of the Airport's Master Plan Expansion 
Program, the Airport is constructing a new ITB which is 
scheduled for completion in May of 2000. All 
international flight operations currently conducted by the 
26 airlines in the CTB, including those of the 18 airlines 
under this subject resolution, will be relocated to the new 
ITB, allowing the CTB to be used as a third domestic 
terminal, according to Mr. Gary Franzella of the Airport. 
Mr. Franzella states that the reassignment of the CTB as 
a third terminal for domestic flight operations and the 
opening of the new ITB as a fourth terminal will enable 
the Airport to increase the total number of passengers the 
Airport can handle from an estimated 40 million in 1999, 
to an estimated 51 million in 2006, an increase of 27.5 
percent. 

2. Of the 26 airlines which will relocate their 
international flight operations to the new ITB, 18 airlines, 
which are the subject of this resolution, are expected to 
sign new Lease and Operating Agreements with the City. 
According to Ms. Schimke, none of the 18 subject airlines 
currently have leases equivalent to the Lease and 
Operating Agreements proposed by this resolution. 
Whereas most airlines that were tenants of the Airport in 
1981 signed Lease and Use Agreements with the Airport, 
thereby controlling most of the available exclusive use 
airline rental space, airlines that became tenants 
subsequently were obliged to make other arrangements. 
As a result, the 18 subject airlines either (a) obtained 
month-to-month permits for the small amounts of space 
not originally leased under Lease and Use Agreement, or 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



for space which has subsequently been surrendered by 
airlines with Lease and Use Agreements, (b) subleased 
from Lease and Use Agreement airlines, or (c) entered 
into "handling agreements" pursuant to alliances, code- 
shares, or similar marketing or ground handling 
agreements, with airlines which have space under either 
Lease and Use Agreements or space permits. Ms. 
Schimke states that such subleases, handling agreements, 
or space permits were not subject to Board of Supervisors 
approval because only leases in excess of ten years and/or 
$1,000,000 in value are subject to Board of Supervisors 
approval. 

According to Ms. Schimke, under the proposed resolution, 
the new Lease and Operating Agreements would benefit 
the Airport because: (a) they put the Airport into a direct 
relationship with the airlines, rather than an indirect 
relationship as is currently the case with airlines that 
have subleases or handling agreements; (b) they provide 
the Airport with direct control over space allocation, both 
in the initial assignment of space and through the 
reallocation procedures described in Attachment III; and 
(c) they assure the Airport of the airlines' longterm 
commitment to the Airport. Ms. Schimke also states that 
the proposed Lease and Operating Agreements would 
benefit the 18 airlines as follows: (a) they give the 
airlines a term of years, which ends June 30, 2011, over 
which to amortize their tenant improvements; and (b) 
they provide parity among airlines at the Airport by, for 
example, giving the airlines voting rights on airline 
organizations advisory to the Airport. 

If any of the 18 airlines choose not to sign their proposed 
Lease and Operating Agreements, they will need to sign a 
month-to-month space permit instead. The same rates 
and charges will apply whether airlines choose to sign 
their Lease and Operating Agreements, or month-to- 
month space permits. Such monthly space permits would 
not be subject to Board of Supervisors approval unless 
they exceeded $1,000,000 in value. 

3. Of the 26 airlines which will relocate their 
international flight operations to the new ITB. eight 
airlines are the subject of Item 8, File 99-1852. of this 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



report to the Finance and Labor Committee. According to 
Ms. Schimke, the 18 proposed Lease and Operating 
Agreements will be similar to the Lease and Use 
Agreements, as modified, for the eight airlines under File 
99-1852, except they will not have the Entitlement Space 
provisions of Lease and Use Agreements. 

4. Under the proposed resolution, the Airport would be 
authorized to modify the allocation of exclusive use space 
in the new ITB without further approval from the Board 
of Supervisors, as long as the modifications are consistent 
with the provisions contained in Attachment III. All 
other modifications to airlines' allocations of exclusive use 
space would require Board of Supervisors approval. 

5. Under the proposed resolution, the Airport could 
terminate an airline's lease if that airline voluntarily 
ceased international flight operations at the Airport, 
subject to Board of Supervisors approval of that lease 
termination. 

6. Under the existing CBT space allocations, joint use 
space includes only gate hold-rooms, baggage handling 
and baggage claim areas, and Federal Inspection Service 
areas. The joint use space approach is being expanded in 
the new ITB. According to Mr. Franzella, all of the new 
ITB's 168 ticket counters will be designated as joint use 
spaces, compared with only eight of the 111 ticket 
counters currently designated as joint use space in the 
CTB. The remaining 103 CTB ticket counters are 
exclusive use spaces under the existing Lease and Use 
Agreements. Mr. Franzella also states that all 24 gate 
hold-rooms in the new ITB will be designated as joint use 
spaces, whereas in the CTB United Airlines has exclusive 
use space rights over five of the CTB's ten gate hold- 
rooms. 

7. As explained in Attachment V, provided by the 
Airport, scheduling of joint use space in the new ITB will 
be managed, under the Airport's oversight, by the airline 
consortium, SFO Terminal Equipment Company, LLC 
(SFOTEC), a company to be formed by the 26 airlines. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



8. Execution copies of the proposed Lease and Operating 
Agreements were sent to the airlines on September '1. 
1999. Final approval is contingent on the Human Rights 
Commission's determination of each airline's compliance 
with, or exemption from, the requirements of San 
Francisco's Equal Benefits Ordinance. Ms. Schimke 
advises that the 18 airlines are currently in various 
stages of obtaining certification of their compliance with, 
or exemption from, that ordinance's requirements, and 
that the Airport anticipates that all 18 will comply. 

9. According to Mr. Franzella, a phased occupancy of the 
subject space will permit all airlines which have exclusive 
use spaces to commence tenant improvements of those 
spaces no later than January 1, 2000. As previously 
noted, the new ITB is scheduled to open in May of 2000. 
While the lessees are not required to make a minimum 
investment per square foot in the tenant improvement 
construction of their exclusive use spaces, they are 
required to meet the requirements of the relevant 
construction codes. Construction of all exclusive use 
spaces for Lease and Operating Agreement airlines will 
be performed under a consolidated contract awarded by 
the Airport's Airline Liaison Office in order to minimize 
potential coordination problems. The exception will be 
the MP clubrooms being constructed by contractors 
individually hired by Air France. British Airways, EVA 
Airways, Korean Air, Lufthansa German Airlines, and 
Virgin Atlantic Airways. Construction of all joint use 
space will be the responsibility of the Airport. 

9. The airlines' payment of rents for the new ITB space 
will commence on the date the new ITB is open and 
operational, as determined by the Airport Director. On 
that date, the airlines' rental payments for the CTB cease. 
The 18 airlines will be expected to surrender their space 
in the CTB immediately. 

10. All lessees will pay rent for their new ITB space in 
accordance with the Airport's rates and charges for airline 
rental space. These are determined annually by the 
Airport using the rates and charges methodology 
prescribed in the Lease and Operating Agreements, and 
contained in Attachment VI, provided by the Airport. The 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



61 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

division between the airlines of the rent payable for the 
new ITB's joint use space will be determined on the basis 
of a "Joint Use Formula" as explained in Attachment VII, 
provided by the Airport. 

11. In summary, the Airport estimates that approval of 
both Files 99-1852 and 99-1853 will result in total 
estimated airline lease revenues for the Airport of 
$37,161,803 from the new ITB in FY 2000-2001, an 
increase of $19,082,405 over the estimated airline lease 
revenues for the Airport of $18,079,398 from the CTB in 
FY 1999-2000. 

Recommendation: Approve the proposed resolution, contingent on the 18 

airlines' compliance with the City's Equal Benefits 
Ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

62 



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(A 



M SFIA DEPARTMENT Or AVIATION MANAGEMENT 



Alrpen 
Comnrsiioii 
City >na County 
of San rnncisco 
Willie L Brown, Jr. 
Mayor 

Honry E. Bemiin 
Pr»«id«m 

Larry Mauola 
Vice Prejiaenl 

Micfual S. Strunsky 

Linae S. Cravton 

Caryl rto 

JOHN L MARTIN 
Airoort Director 



';: ': 7 
Attachment III 




'age 



i of 1 



San Francisco International Airport 



gauwat 10 n« f ianc 



REDUCTION. RELOCATQN. AND/OR REALLOCATION 
OF EXCLUSIVE USE SPACE 



A. When required by a significant shift in market share or to accommodate a new 
airline, the Airport can reduce, relocate, and/or reallocate exclusive use space in 
accordance with the procedures described below. 

B . Airline Ticket Office ( ATO) Procedures 

• ATOs arc the ticket counter support offices located on Floors 3 and 3M of the 
ncwITB. 

• ATO space may be reduced, relocated, and/or reallocated in conjunction with 
reallocation of ticket counter preferential use assignments, which are decided 
by SFOTEC, with Airport oversight, based on flight activity and new ITB 
Ticket Counter Management Protocols. 

• A key objective of the new ITB Ticket Counter Management Protocols is to 
provide each airline with a regular check-in location, with the maximum 
number of positions desired (if available). 

• Reduction, relocation, and/or reallocation of ATO space held by airline* under 
Lease and Use Agreements will occur only after the City has determined that 
(1) there is no unassigned ATO space on Floors 3 or 3M, (2) there is no ATO 
space that may be recovered for reassignment from airlines with space permits, 
and (3) the reduction, relocation, and/or reallocation of leased ATO space will 
not reduce any affected Lease and Use Agreement lessee's space below a 
minimum operating unit 

C. Procedures for Non-Entitlement Space 

• "Non-Entitlement Space" refers to all Exclusive use space with a Lease &. 
Operation Agreement that is not "ATO Space". 

• To reduce or relocate Non-Entitlement Space, the Airport shall develop and 
present a plan and accompanying rationale to SFOTEC and the impacted 
airline(s). Airlines have a 30 day period 

• At the end of the 30 day comment period, the Airport shall deliver a notice to 
the airiine(s) required to reduce or relocate space in accordance with the pian. 
noting that the plan may have been modified during the review process. 

• Non-Enmlemeni Space requires 90 days notice to recover. 



SAN FRANCISCO INTERNATIONAL AIRPORT • PC BOX «S7 . SAN FRANCISCO CALIFORNIA 94128 . TELEPHONE 1650) 731-5000- FAX [KOI 79*-iC0£ 



65 



"ROV. SF1A DEPARTMENT OF AVIATION MANAGEMENT (WED) 10. 6' 99 1 : 04/ST. 10.02/NO. 4S61718188 ? 8 

'Page 2 Attachment III 

Pase 2 of 2 



Buyout Provisions 

• When pursuant to these provisions, reduction or relocation of both Entitlement 
and Non-Entitlement Space is subject to buyout by the Airport of the value of 
the improvements amortized on a straight-line basis over the remaining term of 
the Lease and Use Agreement. If, however, exclusive use space is voluntarily 
surrendered by an airline, then the Airport is not obligated to offer buyout 
compensation. 



66 



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Attachment IV 



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ROM SFIA DEPARTMENT OF AVIATION MANAGEMENT (WED) 10. 6' 99 10: 05/ST. 1 : 02/NO. 436171S183 P 9 

Attachment V 



Page i or T 

AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Alan Gibson DATE: October 6, 1999 



FROM: '-r^Dorothy Schimke, Senior Property Manager 

Department of Aviation Management 



SFO Terminal Equipment Company. LLC 

The airlines that will operate at the new International Terminal Building (TTB) are forming a 
limited liability company, SFO Terminal Equipment Company, LLC (SFOTEC). The purpose of 
this company is to operate and maintain certain equipment and joint use space in the ITB and to 
schedule the usage of such joint use equipment and space among airline members and non- 
member users. 



(1) Operation and Main tenance ofEquipment 

Maintenance of certain operating equipment and systems owned by the Airport will be the 
responsibility of SFOTEC. This equipment includes but is not limited to passenger loading 
bridges, the baggage system, the preconditioned air system, the 400 Hz ground power system, 
flight and baggage information display systems and common use telephones at gate podiums and 
ticket counters. 



(2) Gate and Ticket Counter Scheduling 

Gate scheduling: The scheduling of the new 1TB 's 24 joint use gates will be managed by 
SFOTEC, subject to Airport approval, to maximize the efficient use of those gates. 
Determination of gate usage policy and final resolution of conflicts will rest solely with the 
Airport Director. 

Ticket counter assignment and management: The assignment of the new ITB's 168 joint use 
ticket counters will be managed by SFOTEC, subject to Airport approval, in accordance with 
Ticket Counter Management Protocols designed to maximize the efficient use of those ticket 
counters. Determination of ticket counter usage policy and final resolution of conflicts will rest 
solely with the Airport Director. 



68 



fROM SFIA DEPARTMENT OF AVIATION MANAGEMENT [WED] IC 6' 99 1 : 05/ST. 10:02/NO. 4861718188 I 

Alan Gibson Attachment: V 

October 6, 1999 Page 2 of 2 



(3) Management Services 

Tower operations: The ground movement of aircraft into and out of the new ITB, and within 
non-movement zones designated by the Airport, will be managed by SFOTEC. 

Cleaning and Maintenance: SFOTEC will also manage janitorial services for non-public joint 
use areas, and ramp sweeping. 

Accounting: SFOTEC will be responsible for allocating costs and distributing billings among 
the airline members and non-member users. 



(4) Coordination and Oversight 

All Oversight Committee, chaired by the Airport and including both airline and Airport 
representation, will be responsible for setting SFOTEC's missions, addressing issues of mutual 
concern to the Airport and the airlines, and reviewing SFOTEC's pcrfonnancc. 



69 



tA DEPARTMENT OF AVIATION MANAGEMENT (THU)IO. 7' 99 7:00/ST. 7 : 00/NO. 4861718216 P 2 

Attachment VI 



Page 1 of 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 
CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Alan Gibson DATE: October 6, 1999 

FROM: Dorothy Schimke 

Airport Rates and Charges 

Background 

In 1979 a number of airlines filed suiL lo litigate certain complaints against the City, 
including an allegation that Airport revenues were being unlawfully diverted to the City's 
General Fund. (Federal law prohibits the expenditure of airport revenues for non-airport 
purposes.) In early 1980 the City and the airlines that were parties to the suit entered into 
settlement negotiations that resulted in a detailed Settlement Agreement and an Airline- 
Airport Lease and Use Agreement ("the LU"). Provisions for a substantial restructuring 
of the financial operation of the Airport, including the methodology for calculating 
Airport. Rates and Charges, were incorporated into the LU as part of the Settlement 
Agreement. 

Calculation of Rates and Charges 

In general, the airlines are obligated to pay terminal building rental rates and landing fees 
in amounts that, when included with all other Airport revenues, will be sufficient to cover 
all annual Airport costs. Rates are adjusted annually. Terminal rate adjustments are 
based on the average cost per square foot of providing, maintaining and operating the 
terminal building areas. 

A simplified outline of the methodology for calculating Airport terminal rents is as 
follows: 

1. Expense Forecasting. Airport forecasts its expenses, including both operating and 
capital expenses, for the upcoming fiscal year. 

2. Revenue Forecasting. Airport forecasts its non-airline terminal revenues for the 
upcoming fiscal year. 

• Concession revenues 

• Rents from non-airline tenants 

• Other revenues (e.g., interest on unexpended capital funds) 



70 



FROM SF I A DEPARTMENT OF AVIATION MANAGEMENT (TKU)IO. 7' 99 7:0! /ST. 7 : OO/NC 3216 F 3 

Attachment VI 



Page 2 or 



Alan Gibson 
October 6. 1999 
Pase2 



3. Annual Service Payment. 15% of Concession revenues goes to City's general fund 
as compensation for indirect services to the Airport. 

4. Calculation. 

• Non-airline revenues (net of Annual Service Payment) are set off against 
projected expenses. 

• Remainder (expenses thai are not covered by non-airline revenues) is divided by 
the total square feet of terminal space rented by airlines to determine average rent 
per square foot, which is then apportioned into five rate categories. 

• The higher the number of square feet rented to airlines, the lower the effective 
rental rate required to recover the terminal costs. 



71 



:A DEPARTMENT OF AVIATION MANAGEMENT (TUE)IO. 5' 99 1 6 : 48/ST. 16 :47/NO. 4861718153 ? 2 



Airpofl 

C'rtY and Caunty 
of San Francitco 

Willie L Brown, Jr. 
Meyor 

Henry Z Baman 
President 

Larry Masola 
Vize President 

Michael S Svunsky 

Linda S. Crayan 

Caryl lio 

JOHN L MARTIN 
Airaort Oiracior 




Attachment VII 



San Francisco International Airport 



GATEWAY TO THE PACIFIC 

JOINT USE FORMULA FOR THE NEW ITB 



The total charges for each room comprising joint use space shall be divided among the 
airlines using the new ITB according to the following formula: 

• Twenty percent of each joint space shall be divided equally among all amines using 
that joint use space. Since Alaska Airlines will use only 53.4 percent of the joint 
use spaces, it will pay l/26 m of the 20 percent payment for those spaces. For all 
other joint use spaces, the remaining 25 airlines will pay 1/25" 1 each. These 
proportions will change as individual airlines start or cease international flight 
operations at the new ITB. 

• Eighty percent shall be divided as follows. Each airline using the joint use space 
pays that proportion which the number of its passengers enplaning and/or deplaning 
at the new ITB bears to the total number of passengers enplaning and/or deplaning 
at the new ITB. The proportions for each type of joint use space are calculated on 
the following hases: 



Category 


Tvpe of Space 


Tvpe of Passenger 




I 


Ticket counter/gate 
holdroom 


new ITB enplaned passengers 


n 


Baggage claim /Federal 
Inspection Service 


new rTB deplaned passengers 


n 


Other 3 ro floor and 
above, and 1 st floor 
passenger access 


new ITB total enplaned and 
deplaned passengers 


m 


Other enclosed, 2 1 " 1 and 
below 


new ITB total enplaned and 
deplaned passengers 


TV 


Inbound baggage 
handling 


new 1TB deplaned passengers 


rv 


Outbound baggage 
handling 


new ITB enplaned passengers 


V 


Other unenclosed 


new ITB total enplaned and 
deplaned passengers 



• If for any reason the number of passengers enplaning and/or deplaning at the new 
1TB in the prior fiscal year for any of the airlines using the joint use space 
constitute an inappropriate basis for forecasting that airline's passenger volume for 
the year in which the charges are levied, the City can make appropriate adjustments 
in order to equitably apportion the total costs among all of the airlines using such 
joint use space. 

SAN RANCISCO INTERNATIONAL AIRPORT. ?0 BOX 80S7 . SAN FRANCISCO CAUF0RN1A 9412S • TELEPHONE [6501 79*-5O00- FAX 16501 794-5005 



7 2 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Item 5 - File 99-1811 

Note: The Port has requested that this item be continued by the 

Finance and Labor Committee for one week. 



Department: Port 

Item: Resolution approving a Ground Lease with Ferry 

Building Investors, LLC, for the rehabilitation of the 
Ferry Building, located on the Embarcadero and 
Market Street, as a mixed-use project and approving a 
negative declaration. 

Description: Charter Section 9.118 requires that the Board of 

Supervisors approve non-maritime leases of real 
property or contracts and agreements entered into by a 
City department extending for a period of ten years or 
more. The proposed resolution would approve a 66-3'ear 
Ground Lease between the Port and Ferry Building 
Investors, a California Limited Liability Company 
(LLC), to renovate and restore the Ferry Building as an 
intermodal ferry terminal and mixed-use development. 

The Ferry Building is owned and maintained by the 
Port, which includes three floors of primarily office 
space consisting of a total of 291,872 square feet. 
Within the Ferry Building, the Port currently occupies 
41,934 square feet of office space, or approximately 14 
percent, and leases the remaining 249,938 square feet 
of space to approximately 93 other tenants, including 
three long-term commercial tenants. The three long- 
term commercial tenants include (1) the World Trade 
Club, a private business club, which occupies 29,521 
square feet of space, of which 25,863 square feet is 
under a long-term lease expiring in 2004 and 3,658 
square feet is on a month-to-month lease, (2) Limbach 
& Limbach, a law firm, which occupies 35,434 square 
feet, including 20,197 square feet in a long-term lease 
expiring in 2006 and 15,237 square feet in a month-to- 
month lease, and (3) Amtrak, which occupies 4,100 
square feet with a lease expiring in 2005. 

All of the Port's approximately 90 other tenants in the 
Ferry Building have month-to-month leases or leases 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



which expire by the Fall of 2000. According to Mr. Paul 
Osmundson of the Port, most of the Ferry Building 
tenants have month-to-month leases, including the 
three long-term tenants who have month-to-month 
leases for a portion of their space because the Port has 
been in the predevelopment stage for the proposed 
renovation of the Ferry Building for over five years. 
Therefore, the Port limited the number of tenants with 
long-term leases in order to maximize the flexibility for 
future development of the Fern - Building, Mr. 
Osmundson advises. 

The proposed development of the Fern- Building would 
consist of approximately 40,000 square feet of ground 
level commercial retail space, including fresh and 
prepared food markets and approximately 20,000 
square feet for four restaurants. The ground level, with 
a total of 105,000 square feet, will also contain Ferry 
passenger services, including ticketing booths, 
sheltered covered areas and a Central Concourse with 
major passageways connecting Market Street to the 
Bay, as well as loading and serving areas. 

The second and third floors will contain a total of 
approximately 164,000 square feet of space, including 
approximately 150,000 square feet of market rate office 
space of which approximately 2.500 square feet will be 
used for the Port Commission's hearing room and 500 
square feet will be used for ancillary Port office space. 
The remaining approximately 14.000 square feet of 
space(164,000 less 150.000) would be interior public 
space. Overall, the new Ferry Building would contain a 
total of 269.000 square feet of space, resulting in a 
reduction of approximately 23.000 square feet of space 
from the current approximately 292.000 square feet 
within the Ferry Building. Mr. Alec Bash of the Port 
reports that the reduction in space is a result of the 
restoration of the Ferry Building to contain the original 
Nave Bay. which is a long narrow central hall rising 
higher than the adjacent portions of the building, which 
will open up the center portion of the building from the 
ground floor to the roof, by removing about one-third of 
the second floor and all of the third floor. The proposed 
development will also seismically retrofit and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

74 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



rehabilitate the Ferry Building to current fire and 
safety Building Code standards. 

The Lease Disposition and Development Agreement, 
between the Port and the Developer, which is not 
subject to the Board of Supervisors approval, is 
intended to establish the conditions for the 
development of the Ferry Building by the Developer 
and to state the conditions for the delivery of the 
Ground Lease for the Ferry Building and the site to the 
Developer by the Port. The Lease Disposition and 
Development Agreement between the Port and the 
Developer, Ferry Building Investors, identifies the 
scope of the development project and includes a 
schedule of performance, indemnification requirements, 
relocation of tenant provisions, and other issues related 
to the construction phase of the project. The Lease 
Disposition and Development Agreement was approved 
by the Port Commission on August 24, 1999 and will 
become effective when the Port Director signs the 
Agreement, which Mr. Osmundson advises will not 
occur until the Board of Supervisors approves the 
proposed Ground Lease resolution. The Lease 
Disposition and Development Agreement will then 
expire upon the completion of the Ferry Building's 
construction, which is anticipated to be in 
approximately June of 2002. 

The proposed Ground Lease for the Ferry Building 
between the Port and the Ferry Building Investors, 
which is the subject of the proposed resolution, 
establishes the terms and uses for the Ferry Building 
and identifies the specific compensation and other 
requirements for each of the parties during the term of 
the Ground Lease. This Ground Lease would commence 
after specific conditions are met, which are identified in 
Attachment 1 to this report, provided by the Port. Mr. 
Osmundson advises that these conditions are expected 
to be achieved b5 T January of 2001, and the Ground 
Lease would extend for 66 years, or until 
approximately 2067. According to Mr. Osmundson, the 
Ferry Building Investors proposed the Ground Lease 
term of 66 years, which is the maximum allowable 
under the State's Burton Act. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

Under the proposed 66-year Ground Lease, the 
Developer, Ferry Building Investors, will be responsible 
for all of the costs required for managing, improving, 
operating, maintaining and repairing the Ferry 
Building and the surrounding area. During this period 
of time, the Port would continue to own the Ferry- 
Building and at the conclusion of the 66-year Ground 
Lease, the responsibility for the management, 
operation and maintenance of the Ferry Building and 
aU improvements will revert back to the Port. 

Fiscal Provisions: Attachment 2, provided by the Port, identifies the 
major fiscal provisions of the proposed Ground Lease. 
As shown in Attachment 2, the Port will initially 
receive a minimum guaranteed rent of $1.4 million per 
year, payable on a monthly basis of $116,667 per 
month, from the Ferry Building Investors. In 
accordance with the proposed Ground Lease, if the base 
rent is not paid, such rent payments would continue to 
accrue, with annual interest costs of either ten percent 
or five percent over the Federal Reserve Bank rate, 
whichever is greater. 

This $1.4 million minimum guaranteed annual rental 
income would be adjusted by the Consumer Price Index 
(CPI) even' five years, subject to a minimum of two 
percent and a maximum of four percent per year, or a 
total of between ten to 20 percent every five years. This 
CPI rent adjustment would be paid by the Ferry 
Building Investors to the Port prior to any return on 
investment is paid to Ferry Building Investors, but, 
after the debt service, reserves and other operating 
expenses of the Ferry Building property are paid by 
Ferry Building Investors. If sufficient funds are not 
available to Fern - Building Investors to pay the Port 
this CPI rent adjustment, such payment may be 
deferred, interest-free, until such funds are available. 

In addition to the $1.4 million annual adjusted rent 
payments, as shown in Attachment 2. the Developer 
will pay the Port a Participation Rent equal to 50 
percent of the net income received by the Developer, on 
a quarterly basis, beginning six months from the date 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

76 



Memo to Finance and Labor Committee 

November 3.. 1999 Finance and Labor Committee Meeting 



that the Fern 7 Building's net cash flow is positive. This 
Participation Rent would be paid after deducting the 
annual adjusted CPI rent payments and after the 
Developer receives an 11 percent return on their 
equity. Therefore, the Port would only receive such 
Participation Rent, if Ferry Building Investors 
revenues exceed not only their operating and 
maintenance costs, debt service and reserves, but also 
the adjusted S1.4 million annual CPI rent payments to 
the Port and an 11 percent return on equity to Ferry 
Building Investors. 

As outlined in Attachment 2, the proposed Ground 
Lease also contains specific provisions giving the Port 
an option to share in the net proceeds from the 
transfer, sale, assignment or refinancing of the Lease. 
If the Fern 7 Building Investors refinances the lease, the 
Port would be paid 30 percent of all net refinancing 
proceeds. Assuming that under such refinancing, Ferry 
Building Investors would be realizing funds and thus 
increasing the debt service cost, the refinancing would 
serve to reduce the amount of Participation Rent that 
would be available to be paid to the Port. Alternatively, 
if Ferry Building Investors refinances to realize lower 
debt service costs, the Port would potentially realize 
increased Participation Rent, as the debt sendee costs 
are reduced. If Ferry Building Investors transfers or 
sells the Ground Lease, the Port can elect to receive 30 
percent of the net proceeds from the transfer or sale, 
but, in return, the Port would relinquish the 50 percent 
Rent Participation provision, although the Port would 
continue to receive the CPI adjusted monthly rent 
payments. 

Given these financial provisions, Attachment 2 
identifies the Port's likely projected revenues totaling 
S88.4 million over a 20-year period, assuming that the 
Ground Lease is refinanced after ten years and sold 
after 20 years. Although this analysis only reflects the 
initial 20-year period, during the remaining 46 years of 
the proposed 66-year Ground Lease, if the Ground 
Lease is sold, the Port would continue to receive the 
CPI adjusted monthly rent payments, or an estimated 
$64.4 million from the base rent and up to an 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

77 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

additional $166 million from the CPI adjustments, 
assuming an average inflation rate of 3.2 percent, for a 
total of $318.8 million ($88.4 million plus $64.4 million 
plus $166 million). Mr. Osmundson also notes that if 
the Ground Lease is not sold or transferred, although 
the Port would not receive the estimated $24.5 million 
in sales proceeds as shown in Attachment 2, the Port 
would continue to receive the CPI monthly rent 
payments totaling up to approximately $230.4 million 
($64.4 million plus $166 million) and the 50 percent 
Rent Participation revenues for the subsequent years, 
which are estimated by Ferry Building Developers to be 
between approximately $3.4 million to $22.4 million 
annually. 

Comments: 1. Presently, the Port occupies 41.934 useable square 

feet of administrative office space in the Ferry- 
Building. In addition, the Port indicates that they 
currently occupy 4,610 square feet of storage space in 
the Ferry Building, that will be moved to an off-site 
storage facility. The Port intends to relocate their 
administrative offices to Pier 1, under a 50-year lease 
and sublease arrangement with AMB Property 
Corporation, which was approved by the Board of 
Supervisors in April of 1999 (Resolution No. 329-99). 
Pier 1 is located immediately adjacent to the Fern- 
Building. Under the Pier 1 sublease, the Port will 
occupy 45,630 useable square feet of space, an increase 
of 3,696 square feet. In addition, as noted above, the 
Port will lease 3,000 square feet of additional space in 
the Fern* Building, for the Port Commission hearing 
room and related office space, for a total of 4S.630 
square feet of space for the Port, as compared with the 
current 41,924 square feet, an increase of 6,706 square 
feet, or 16 percent. It should also be noted that the Pier 
1 sublease allows for the Port to occupy up to an 
additional 30,000 square feet of space during the 50- 
year term of the sublease. 

2. Under the previously approved Pier 1 lease and 
sublease arrangements. AMB Property Corporation will 
construct and manage a proposed new office building. 
When completed, AMB will occupy a portion of the new 
Pier 1 office space, sublease a portion of the new office 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

78 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



space to the Port and sublease a portion of the new 
space to other outside tenants. Under such 
arrangements, the Port will pay AMB Property an 
initial rent of $153,051 per month for 52,475 square 
feet of office space, or approximately S2.92 per square 
foot per month (S35 annually). The sublease has 
various escalation clauses, which become effective over 
the 50-year term of the lease and sublease. 

Under these arrangements, previously approved by the 
Board of Supervisors, AMB Property will receive a 
return of 11 percent on their estimated construction 
costs of $34,511,526, or $3,796,268. Under a revenue- 
sharing arrangement, beginning in year six, and 
continuing for the remaining 45 years of the lease, 
AMB will pay the Port 50 percent of the total rental 
income received by AMB from all the tenants, including 
the Port and AMB. At the end of the 50-year term of 
the lease and sublease, the Pier 1 building and all 
improvements will belong to the Port. 

3. Pier 1 construction began in August of 1999 and is 
projected to be completed in December of 2000. As soon 
as it is completed, the Port anticipates relocating its 
administrative offices and staff to the newly renovated 
Pier 1 facility. The Ferry Building construction is then 
projected to begin immediately thereafter in January of 
2001, and to be completed by June of 2002. One of the 
conditions stated in the Ferry Building Lease 
Disposition and Development Agreement is that if the 
Port is unable to vacate the Ferry Building by January 
of 2001, due to a delay in the Pier 1 project, the Port 
has various options to extend that date, with graduated 
penalties in the form of per diem rent credits to be paid 
to Ferry Building Investors the further the date is 
extended. Conversely, the Ferry Building Investors 
must meet their specific conditions by that date, or pay 
the Port $75,000 per month for their delays. 

4. Mr. Osmundson notes that when the renovations at 
the Ferry Building are completed, office and retail 
space in the Ferry Building will rent at the then 
current market rates, which is estimated to be $53.89 
per square foot per year for office space, and $40.93 per 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

79 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



square foot per year for retail space. Mr. Bash advises 
that the Port currently receives $16.68 per square foot 
per year from the World Trade Club and $32.64 per 
square foot per year from Limbaugh &. Limbaugh, from 
their long-term leases at the Ferry Building. The 
proposed Ferry Building office space rate of 
approximately S54 per square foot is $19 more per 
square foot, than the proposed rent of $35 per square 
foot, that the Port will pay for office space in Pier 1. 

5. Mr. Osmundson advises that the Port will not be 
required to pay Ferry Building Investors for tenant 
improvements or the use of the 3,000 square feet of 
additional space in the Ferry Building, to be used for 
the Port Commission meetings and for an ancillary 
office. Currently, the Port occupies all of its Ferry 
Building space rent-free. However, Mr. Osmundson 
notes that Ferry Building Investors will be able to rent 
out the Port Commission meeting room and the 
ancillary office space when the Port is not using such 
space, in accordance with a proposed sublease. Mr. 
Osmundson reports that the sublease between Ferry 
Building Investors and the Port for use of this 3,000 
square feet of space in the Fern - Building will be 
subject to the Board of Supervisors approval and is 
anticipated to be brought to the Board within the next 
three months. 

6. On May 15, 199S, the Port issued a Request for 
Qualifications (RFQ) to Rehabilitate and Lease the 
Ferry Building as a mixed-use project. Mr. Osmundson 
advises that this RFQ was advertised in the Wall 
Street Journal, Los Angeles Times, New York Times, 
Urban Land Magazine and numerous other 
publications, and that the RFQ was sent to over 100 
firms. In response, the Port received four qualification 
statements and subsequently, the Port invited the four 
respondents to submit proposals for development of the 
Fern* Building. The four respondents were: (1) Madison 
Marquette Realty Services. (2) TrizecHahn 
Development Corporation. (3) Mentmore Development 
Company/Mills Corporation and (4) William Wilson & 
Associates. An analysis of the four proposals was 
conducted by the Port's staff and assisted by outside 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

80 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



real estate consultants, Keyser Marston Associates and 
the accounting firm of KPMG Peat Marwick. On 
November 17. 1998, the Port staff recommended and 
the Port Commission selected William Wilson & 
Associates, located in San Mateo, as the developer to 
enter into an Exclusive Right to Negotiate Agreement 
for the Fern. - Building (Resolution No. 98-114). 

William Wilson and Associates subsequently merged 
with Cornerstone Properties, a national real estate 
investment trust, and is now known as Wilson 
Cornerstone. Wilson Cornerstone created a 
development entity known as Ferry Building Investors, 
LLC, to act as the developer for the Ferry Building 
project. The Port advises that Wilson Cornerstone, the 
parent company of Ferry Building Investors, is also 
currenthy constructing the Gap Headquarters building, 
at The Embarcadero and Folsom Street and was the 
developer for the restoration of the Flood Building, both 
landmark buildings in San Francisco. The Board of 
Directors and the Officers of Wilson Cornerstone, Inc. 
are identified in Attachment 3 provided by the Port. 

7. As shown in Attachment 4 provided by the Port, 
Ferry Building Investors estimate project construction 
costs of approximately $70 million, which includes 
S2, 683, 333 of Ground Lease minimum rental payments 
to the Port during the construction period. According to 
Mr. Osmundson, the construction management firm of 
O'Brien Krietzberg has reviewed these estimates for 
the Port and determined them to be reasonable. 
However, Ms. Diane Millner of the City Attorney's 
Office reports that if the actual costs exceed the 
developer's estimates, then Ferry Building Investors 
would be liable for any cost overruns, and not the Port. 
However, Ms. Millner notes that any additional costs 
that are incurred by Fern* Building Investors will 
ultimately affect the Port's revenues, since the 
proposed project has shared public/private 
Participation Rent provisions. 

8. The Ferry Building is a City landmark fisted on the 
National Register of Historic Places. After construction 
is completed, the Developer expects to receive 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

81 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



certification from the National Park Service that the 
construction complies with the Secretary of Interior's 
Standards for Rehabilitation, making the project 
eligible for a 20 percent Federal Historic Preservation 
Tax Credit. Mr. Osmundson advises that these Tax 
Credits, which are similar to the Federal Affordable 
Housing Tax Credits, will enable the Ferry Building 
Investors to increase the amount of cash available for 
the project, which will potentially increase the amount 
of net cash that will be available to split with the Port 
under the Rent Participation provisions. 

9. Currently, the Fern- Building has 41 parking spaces. 
Under the proposed Fern - Building development, there 
would be no on-site parking. The Budget Analyst notes 
that the Planning Department in a letter of February 
16, 1999 granted an exemption to the adjacent Pier 1 
project from all Planning Code off-street parking 
requirements, which was previously approved by the 
Board of Supervisors. The current Planning Code 
requirement is for one off-street parking space per 500 
square feet of office and retail space development and 
slightly higher off-street parking requirements for 
restaurant space. Based on the projected use of the 
269,000 square feet of the Ferry Building project, 514 
off-street parking spaces would be required. However, 
according to Mr. Bash, this parking requirement may 
be reduced based on the Fern Building's already 
existing deficit of parking. Mr. Bash advises that the 
developers for the Fern Building project will be 
seeking an exemption from the Planning Department 
for such off-street parking requirements. 

10. Under the proposed agreements, Fern Building 
Investors will be required to earn various types of 
insurance (e.g., property insurance, commercial 
liability insurance, business insurance, etc.) and the 
agreements contain various indemnification provisions. 
Mr. Keith Grand, the City's Risk Manager reports that 
he has reviewed the insurance and indemnity 
provisions and he recommends the following 
amendments be incorporated in the Ground Lease, to 
further protect the City: (1) In Section 18.1(b), General 
Insurance Requirements, the Lease currently states 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

82 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



that all insurance shall be carried under a valid and 
enforceable policy issued by insurers of recognized 
responsibility that are rated Best A-:VI or better. Mr. 
Grand recommends that the rating be changed from A- 
VI to A-VEtt, which is a higher rating and is the City's 
usual minimum requirement for insurance carriers; (2) 
In Section 18.2, Port Entitled to Participate, the Lease 
currently states that the Port shall not be entitled to 
participate in and consent to any settlement, 
compromise or agreement with respect to any claim for 
any loss in excess of $5 million covered by the 
insurance required to be carried, if the tenant has 
agreed in writing to commence and complete 
restoration. Mr. Grand advises that the Port should be 
able to participate in such insurance settlements, that 
would otherwise go solely to Ferry Building Investors. 

11. The proposed resolution would also adopt the 
findings with respect to the Final Negative Declaration 
for the Ferry Building Project, which was issued by the 
Planning Department on October 1, 1998. On August 
24, 1999, the Port Commission adopted the Final 
Negative Declaration and mitigation monitoring 
program for the Feny Building Project. 

12. In accordance with the proposed conditions for 
entering into the Ground Lease, as shown in 
Attachment 1, the Port must deliver the Ferry Building 
to Ferry Building Investors free of all tenants and 
occupants, except the World Trade Club (WTC), 
Limbach & Limbach and Amtrak, the three tenants 
with long-term leases in the Ferry Building. 
Furthermore, as stated in the Lease Disposition and 
Development Agreement, Ferry Building Investors is 
responsible, at no cost to the Port, for the relocation or 
buyout of these three long-term tenants, prior to 
beginning renovations of the Ferry Building. Mr. 
Osmundson advises that the World Trade Club is 
currently objecting to (1) potential termination of its 
short-term (month-to-month) lease provisions, (2) 
potential termination of its short-term parking lease on 
adjacent Port property and (3) the developer not 
negotiating in what the World Trade Club considers to 
be good faith. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

83 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



13. In addition to the S8S.4 million that the Port is 
estimating it will receive over the first 20 years of the 
proposed Ground Lease. Mr. Osmundson reports that 
the City will receive approximately $700,000 annually 
from Possessory Interest Taxes from Ferry Building 
Investors and approximately $300,000 annually from 
Sales Taxes generated by the proposed retail 
establishments, or a total of $1.0 million annually. 
Currently. Mr. Osmundson reports that the City 
receives approximately $250,000 annually from 
Possessory Interest Taxes paid by the various leasees 
in the Fern- Building and approximately $10,000 
annually from Sales Taxes generated by the few retail 
establishments, or a total of $260,000. Possessory 
Interest Taxes are a means for the City to collect 
Property Taxes on public property that is used for 
private purposes. Overall, Mr. Osmundson estimates 
that the proposed Ferry Building project will generate 
an additional $740,000 of annual revenue for the City's 
General Fund. 

14. As discussed above, the Port currently owns, 
operates and maintains the Fern - Building, including 
providing security, janitorial, garbage, utilities, 
insurance, maintenance, property management and 
administrative support functions. As shown in 
Attachment 5 provided by the Port, in FY 1998-99. the 
Port spent a total of $1,350,000 on such services for the 
Ferry Building. During FY 1998-99, the Port generated 
a total of $2,553,144 in gross revenues from the Ferry 
Building, thus realizing ($2,553,144 gross revenues less 
$1,350,000 of costs) $1,203,144 of net revenues for the 
Port. 

It should be noted that by comparison. Ferry Building 
Investors projects that in 2003. the first year of 
occupancy for the new Fern - Building, total gross 
income will be approximately $12 million and operating 
expenses, including taxes (which the Port did not incur) 
will be approximately $3.2 million, resulting in a net 
operating income of approximately S8.8 million. After 
payment of the Port's base $1.4 million annual rent and 
estimated debt service payment of $3.6 million. Ferry 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

84 






Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Building Investors projects realizing a net cash flow of 
approximately S3. 8 million, this first year of operation. 

15. Under the proposed Ground Lease provisions, the 
Ferry Building Investors will assume responsibility for 
the construction, operation and maintenance of the 
Ferry Building beginning in January of 2001. 
Therefore, all of the $1,350,000 of costs that the Port is 
currently incurring to support the Ferry Building's 
operations and maintenance should cease. In addition, 
Mr. Osmundson advises that Ferry Building Investors 
will be responsible for maintaining the exterior area, 
up to 20 feet, surrounding the Ferry Building, which 
the Port currently maintains. Mr. Osmundson could not 
provide the Budget Analyst with an estimate of the 
additional costs that the Port currently incurs to 
maintain this exterior area, which will also no longer 
be necessary once Ferry Building Investors assumes 
control of the interior and exterior Ferry Building 
operations and maintenance. 

Mr. Osmundson advises that the Port should be able to 
reduce its contracts for security and janitorial services 
and for the direct garbage, utility and insurance costs, 
at an estimated total annual cost of $1,087,000. 
However, Mr. Osmundson reports that the Port does 
not plan to cut back the reserve funds or the 
maintenance, property management and 

administrative staff that are currently assigned to the 
Ferry Building, at an estimated annual cost of 
approximately $263,000. Instead, Mr. Osmundson 
reports that the Port intends to reallocate such funds 
and staff to other Port properties, as needed. However, 
the Budget Analyst recommends that the FY 2000-2001 
budget for the Port be reduced by $675,000, or the six 
month portion of the estimated $1,350,000 annual 
costs, which would no longer have to be incurred by the 
Port, assuming a January of 2001 transfer of the 
property from the Port to Ferry Building Investors. 
Furthermore, the Budget Analyst recommends that an 
additional $675,000 be reduced" from the FY 2001-2002 
Port budget, to reflect the additional six months of 
savings during the following year. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

16. On September 10, 1999, Mr. Douglas Wong, the 
Executive Director of the Port issued a memorandum to 
the Members of the Finance and Labor Committee 
responding to the request for information on the 
development options available to the Port in restoring 
and rehabilitating properties, such as the Fern* 
Building. This memorandum discussed the Port's 
development options of having the (1) Port as 
Developer, (2) Port as Ground Lessor, and (3) Port as 
Ground Lessor under a Private-Public Partnership. The 
conclusion drawn in this memorandum is that "the Port 
will improve its chances of creating a successful project 
(thereby maximizing its revenue) by bringing in the 
capital resources and skills of Wilson Cornerstone as 
the developer," with the Port as Ground Lessor under a 
Private-Public Partnership. 

The Budget Analyst notes that in both the Best and 
Conservative Case Projections included in this 
memorandum, the Port assumes that Ferry Building 
Investors will sell the Ground Lease in year 20, thus 
realizing an additional $22. 7 million to $39. 7 million of 
revenue for the Port, under these two private developer 
scenarios. Similarly, as reflected in Attachment 2. the 
Port assumes not only a sale of the Ground Lease in 
year 20, netting the Port an estimated $24.5 million, 
but an additional $14.3 million from the Port's share of 
the refinancing proceeds in year 10 of the Ground 
Lease. Together, these two provisions would yield the 
Port $38.8, or approximately 44 percent of the total 
estimated $88.4 million projected over the 20-year 
period. Yet, while these scenarios assume the developer 
will sell the leasehold interest in year 20, Mr. 
Osmundson states that the Port cannot assure or even 
predict when or if the developer would ever refinance, 
transfer or sell the proposed Ground Lease. 

17. If the Fern* Building Investors want to sell, 
transfer, assign or refinance the Ferry Building Ground 
Lease, such sale, transfer, assignment or refinancing 
would not be subject to the Board of Supervisors 
approval, according to Mr. Osmundson, unless there 
were to be amendments to the Ground Lease. Mr. 
Osmundson also advises that the Port cannot 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

86 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



reasonably withhold the Port's consent of such a sale, 
transfer, assignment or refinance. However, given the 
66-year long-term length of the proposed Ground Lease, 
and the likelihood that the lease may be sold at 
sometime in the future, the Budget Analyst 
recommends that such future sale, transfer or 
assignment of the proposed Ground Lease from the 
Ferry Building Investors be subject to review and 
approval by the Board of Supervisors. 

18. The Budget Analyst raises the following concerns 
about the proposed Ground Lease for the Ferry 
Building: (1) the Port would occupy 3,000 square feet of 
additional space in the Ferry Building, in addition to 
the already increased Port administrative space of 
45,630 square feet, and additional expansion potential 
of 30,000 square feet in the adjacent Pier 1 facility; (2) 
there is not proposed to be any parking available at the 
Ferry Building, although the Planning Code 
requirement is for 514 off-street parking spaces; (3) the 
City's Risk Manager recommends two insurance 
provisions be changed to more adequately protect the 
City, as described in Comment 10 above; (4) the World 
Trade Club, an existing long-term tenant, has raised 
various objections; (5) the Port's intention to continue 
to maintain the same level of Port maintenance, 
property management and administrative staff and 
associated costs of approximately $263,000, after the 
Ferry Building is transferred to Ferry Building 
Investors for their operation and maintenance; (6) the 
reasonableness of the Port's financial analysis to 
include future sale of the Ground Lease for between 
$22.7 million to $39.7 million in net revenues to the 
Port, when the likelihood of such an event is unknown; 
and (7) any future transfer, sale or assignment of the 
proposed 66-year Ground Lease for the Ferry Building 
would not be subject to the Board of Supervisors 
approval, unless amendments were made to such 
Ground Lease. 

19. Ms. Millner advises that the Board of Supervisors 
cannot amend the proposed Ground Lease, which is the 
subject of this proposed resolution. According to Ms. 
Millner, the Board of Supervisors can only approve, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

87 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

disapprove or continue the proposed resolution. 
Therefore, the Budget Analyst recommends that the 
Board of Supervisors continue the proposed resolution, 
to permit the Port to renegotiate with Ferry Building 
Investors regarding the issues raised in this report, as 
summarized in Comment No. 18. 

Recommendations: Continue the proposed resolution to request that the 
Port include the following amendments in the Fern- 
Building Ground Lease: (1) the City's Risk Manager's 
recommended changes pertaining to insurance 
provisions, as described in Comment 10 above; and (2) 
require that any future sale, transfer or assignment 
(except for assignment for the purpose of financing) of 
the Ground Lease, be subject to approval by the Board 
of Supervisors, as described in Comment 17 above. In 
addition, before the Board of Supervisors approves the 
proposed resolution, the Port should provide a plan in 
writing to the Board of Supervisors on specifically how 
the Port will reduce their FY 2000-01 budget by 
$675,000, and the Port's FY" 2001-02 budget by an 
additional $675,000, for a total annualized reduction of 
$1,350,000, in accordance with our analysis as 
described in Comment 15 above. 

Furthermore, the Budget Analyst considers approval of 
the proposed resolution to be a policy matter for the 
Board of Supervisors, due to the numerous issues 
raised in Comment No. 18 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

88 



Attachment 1 



Following are the conditions that must be satisfied for the escrow to close, whereby the Lease and 
the site will be delivered to Developer 

• Port has approved the construction design documents. 

• Port has issued a full building permit or a site permit 

• Developer has submitted to the National Park Service Part 2 of the Historic Preservation 
Certification Application. 

• Developer has received all required approvals from regulatory agencies, including BCDC. 

• Developer has submitted to the Port an updated Construction Budget, and evidence of a 
guaranteed maximum price contract for the construction of improvements consistent with the 
Construction Budget. 

• Developer has provided the Guaranty. 

• Pier 1 is completed. 

• Developer has submitted evidence regarding the establishment of an investment entity to 
utilize Historic Tax Credits. 

• Developer has submitted a certificate of insurance for required insurance coverage and the 
title company is prepared to insure title. 

• Executed copies of the Lease have been submitted into escrow. 

• The Ferry Building is free of all tenants and occupants, except WTC, Limbach and Amtrak. 

• Developer has submitted a First Source Hiring Agreement and an HRC Certificate of 
Compliance and the Port has approved them. 

• Port has completed certain offsite work in the Apron .Area and issued permits to enter to 
Developer for staging and other construction activity. 

• There have been no adverse changes in the condition of the site. 



89 



Attachment 2 



IV. FINANCIAL ANALYSIS 

.As previously discussed, under the Lease the Port stands to receive revenue from the project as 
follows: 

Minimum Rent: Guaranteed S 1 .4 million annually 

.Annual Consumer Price Index ("CPI") Adjustment: Between 10% and 20% every five years, 
after operating expenses, reserves and debt service. Unpaid CPI adjustments accumulate. 

Participation Rent: 50% of net cash flow, after 1 1% developer return on equity. Unpaid return 
on developer equity accumulates. 

Participation in Refinance Proceeds: Port receives 30% of net proceeds from refinancing. 

Participation in Transfer or Sale Proceeds: / Port can elect to receive 30% of net proceeds from a 
transfer or sale, but thereafter relinquishes its 50% participation in net cash flow. 

The scenario presented below is for a 20 year period, assuming 3% inflation, a refinance after 10 
years, and a sale after 20 years. 

Port Revenue Cumulative Port Revenue, Developer Projected Rents 

Minimum Rent S28.0 million 

CPI Adjustment Rent S5.6 million 

Participation Rent S16.0 million 

Refinancing Proceeds SI 4.3 million 
Sale Proceeds S24.5 million 

TOTAL S88.4 million 



90 



or LA^-i-U l 



Accacnmenc J 



CORNERSTONE PROPERTIES INC 
BOARD OF DIRECTORS 



OFFICERS 



*'ILLIAM M'tLSON III 

Chairman of 'Cornerstone Properties Inc. 
JOHN 6. MOODY 

President and Chief Executive Officer of Cornerstone Properties Inc 

DICK VW( PiK »OS 

Real Estate Consultant to Pensiocnfonds PGGM 

CECIL D. CONLEE 

Managing Director ofRodamco and Cncirman ofCGP. Advisors 

RODNEY C. DIfcCOCK 

Executive Vice President of Cornerstone Properties Inc. 

slake eagle 

Chairmen of ike Center for Real Estate at the 

Massachusetts Institute of Technology 

DONALD G. FISHES. • 

Chairman and Pounder of Gap Inc. 

randaU a. hack 

Founding Member of Nassau Capital LLC 

DR. KARL-iVDWIG KERV.AKN 

Financial Consultant 

HANS C. MAUTNSR 

Vice Chairman of Simon Property Group 

DR. LUTZ KEL1INGER 

Managing Director of Deutsche Bank AG 

CRAIC R. STAPLETON 

President of Marsh H. McLennan Real Estate Advisors 

MICHAEL I. C.TOPHAM 

Executive Vice Prtsident and Managing Director ofHincs 

JAN VAN DERVJLIST 

Director of Real Estate Investments for Pensiocnfonds PGGM 



WILLIAM WILSON 11: 

Chairman of the Board of Directors 

JOHN £. MOODY 

President and 

Chief Executive Officer 

K. LEE VAN BOVEN 

Chief Operating Officer and 
General Counsel 

KODNSTC. DIMOCK 

Exccvttvt Vice President 

john j. Hamilton hi 

Chief Development Officer 

KEVIN P. KAHONFY 

Senior Vict President and 
Chief Financial Officer 

R. MATTHEW MORAN 

Cnie/insessment Officer 

JAMES W. ARCS 

Senior Via President 
Asset Management 

SCOTT M. DALRYMPLI 

Senior Vict President 
Asset Management 

THOMAS I. LOFTUS 

Cnie/AaiTurtinratii/e Officer 
and Secretary 

THOMAS A NYE 

Vice President one Treasurer 

A. ROBERT PARATTI 

Senior Viet President, Leasing 

STEPHEN J. PILCH 

Senior Vice President 
Assa Management 

THOMAS t. SULLIVAN 

Senior Vice President 
Development 

JANET L ASTON 

Vict Prtsident, Information Services 

andrtt c. brown 
Vict President, Leasing 



JON W. CLARK 

Vice President, Internal Audit 

EDWARD f. DONNELLY. JR. 

Vice President, Property Services 

STEVEN D. ELLIOT 

Vice President 
Investment Management 

C-REGORY G. FOC-G 

Vice President, leasing 

CHARLES R- HA.iiT.EY 

Viet President 

Southern California Region 

BRUCE A. JAMES 

Vice President, Engineering 

RICHARD A. LITTLE 

Vice President 
Property Management 

KHEAY Y. LONE 

Vice President, Development 

KAfclN c. maas 

Vice President 

Larry m. melo 

Vice President, Boston Region 

JOHN C MOE 

■Vice President, Leasing 

TERENCE J. REAGAN 

Vice President, Development 
FRANCIS K. SHIELDS. JR. 

Vice Prtudtnl, Acquisitions 

RICHARD SPRINCWATER 

Vice President, .Development 

ROBERT T. SORRENTINO 

Vice President, Asset Managemer. 

SCOTT A. STEPHENS 

Vice President, Peninsula Region 

CASSANDRA ). TORKJLDSON 

Vice President, Human Resource: 

martin i. ward 

Vice President, East Bay Region 



91 



Attachment A 



FERRY BUILDrNG LEASE DISPOSITION AND DEVELOPMENT AGREEMENT 
Form of Budget 



Construction Budget: 




Acquisition of Ground Lease 


S927.0O0 


Lease Modification Costs 


5.109,929 


Environmental Mitigations 


3,750,000 


Entitlements 


281,000 


Architects &. Engineers 


4,334,212 


Shell Construction 


37,832,500 


Retail Tenant Work 


968,415 


Office Tenant Work 


5,982,500 


Retail Leasing Commissions 


849,410 


Office Leasing Commission 


1,037.219 


Marketing Expenses 


178,000 


Legal 


222,000 


Financing Fees 


756,000 


Development Fee 


2,610,127 


Contingency 


2,037,500 


Development Period Interest 


2,638,551 


Operating Shortfall: 
Development Period Ground 
Rent S 


2,683,333 


Development Period Operating Expenses 1 ,924, 1 50 
Less: Development Period 
Income (4, 221. 866) 


Total Construction Budget 


385.617 


$69,899,980 



92 



Ul_l cM --:1 k2j:irVH fOri I Or SF EXECUTIVE 



P. 2/2 

Attachment 5 



Ferry Building/World Trade Center 




Expenses 




Fiscal 


Year 19 


98-99 

Estimated 
Annual Amt. 


Description 




(SOOO's) 


Security 




$128 


Janitorial 




370 


Scavenger 




39 


Electricity 




340 


Gas 




72 


Water/Sewer 




38 


Insurance 




100 


Maintenance & Reserves 


176 


Administrative 




87 


TOTAL 


$1,350 



93 



Memo to Finance and Labor Committee 

November 3, 1997 Meeting of the Finance and Labor Committee 

Item 6- File 99-1869 



Department: 
Item: 

Location: 
Lessor: 

Lessee: 



Effective Date of 
Lease Modifications: 

Description: 



Airport 

Resolution authorizing modifications to Lease No. 99- 
0035 between the DFS Group L.P. and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

New International Terminal Building (ITB) of the Airport 

City and County of San Francisco, acting by and through 
its Airport Commission 

The DFS Group L.P., a Delaware limited partnership 
("DFS") 



May of 2000 

The Airport and DFS have negotiated Lease No. 99-0035 
for "post-security" retail spaces which are located beyond 
the security checkpoints in the new ITB. The subject ten- 
year concession lease, which has yet to be signed but 
which is due to commence at the opening of the new ITB 
in May of 2000 and to expire in May of 2010, would cover 
52,946 square feet at 27 locations in the new ITB 1 . This 
lease was approved by the Board of Supervisors on April 
5, 1999 (Resolution No. 283-99). Under the subject 
concession lease, DFS would be responsible for both the 
direct provision of duty free 2 retail stores and the 
subleasing of non-duty free 3 retail stores. The table 
included in the Attachment to this report provided by the 
Airport lists (a) DFS's proposed subtenants, (b) each 
subtenant's Disadvantaged Business Enterprise (DBE) 
status, (c) the retail facilities each subtenant would 
provide, and (d) the square footage of each subleased 
space. These subtenants would occupy a total of 17,087 



1 Ms. Lorri Vasquez of the Airport states that the reference in Lease No. 99-0035 to a total of 
51.914 square feet was based on approximate figures which have since been revised so that 
the approximate total space covered by the existing lease is actually 52,946 square feet. 

2 "Duty free" merchandise is defined as goods sold without taxation to international travelers 
for consumption outside of the United States of America. 

3 "Non-duty free" merchandise is defined as goods that are taxed at the point of sale. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9k 



Memo to Finance and Labor Committee 

November 3, 1997 Meeting of the Finance and Labor Committee 



square feet, or 30 percent of the total 57,353 square feet 
designated under the DFS concession lease. 

The proposed resolution would modify the concession 
lease between DFS and the Airport as follows: 

(1) The addition of 4,407 square feet of "pre-securny' 
retail space, which increases the total amount of 
space covered by the subject concession lease from 
52,946 square feet in 27 locations to 57,353 square 
feet in 29 locations in the new ITB. The additional 
4,407 square feet of space is located before the 
security checkpoints in the new ITB, for two 
additional retail locations: (a) an 1,684 square foot 
Apothecary Store, which would sell various items sold 
in a standard drugstore, and (b) a 2,723 square foot 
Unisex Apparel Store, which would sell casual 
clothing. These two stores would have a five year 
term from May of 2000 to May of 2005 which the 
Airport can extend by one additional five year 
extension term for either or both stores. 



Comments: 



(2) Delegation to the Airport, pursuant to Section 1.2 of 
the concession lease, of the ability to modify the 
future size and usage of the retail space being leased 
to DFS without subsequent Board of Supervisors 
approval. 

1. The concession lease would require DFS to pay the 
Airport the greater of the two following amounts in rent: 
either (a) a minimum annual guarantee of S26, 100,000 
which can be increased annually according to composite 
changes in the Consumer Price Index and passenger 
traffic, as set out in the concession lease, or (b) a 
percentage of annual gross revenues which is calculated 
on the following basis: 



Annual Gross Revenues 

Up to and including $50,000,000 
$50,000,000.01 - $100,000,000 
Over $100,000,000 



Dutv Free Non-Dutv Free 



15% 
20% 
25% 



12% 
14% 

16% 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

95 



Memo to Finance and Labor Committee 

November 3, 1997 Meeting of the Finance and Labor Committee 



By comparison to the above noted minimum annual 
guarantee of $26,100,000, m FY 1998-99 DFS paid the 
Airport $20,700,000 m rent, according to Mr. Peter 
Nardoza of the Airport. 

2. Under the proposed modifications to the previously 
approved DFS concession lease, which would provide 
4,407 additional square feet for an Apothecary Store and 
a Unisex Apparel Store, DFS would not pay an additional 
minimum annual guarantee to the Airport. DFS would 
only be required to pay the Airport rent for those stores 
on the basis of a percentage of annual gross revenues, 
calculated as follows: 



Annual Gross Revenues Percentage Rent 

Up to and including $500,000 12% 

$500,001 up to and including $1,000,000 14% 

Over $1,000,000 16% 



3. DFS would sublease the Apothecary Store retail space 
to Ms. Donnetta Stafford, a DBE owner who has already 
entered into two subleases with DFS for a Travel 
Accessories Store and a Leather Goods Store at the new 
ITB. Ms. Stafford also subleases retail space from DFS 
for a "health and herb concept" store in the existing 
International Terminal which sells some merchandise 
that is comparable to the merchandise which would be 
sold through her Apothecary Store in the new ITB. 

DFS would operate the Unisex Apparel Store retail space 
under a licensing agreement with Esprit. According to 
Ms. Vasquez, the Unisex Apparel Store would be the first 
single brand unisex apparel store in the Airport. 

4. Under the proposed modification to Section 1.2 of the 
concession lease, the Airport would be authorized to make 
the following changes to the concession lease, without 
subsequent approval from the Board of Supervisors: 

(a) relocate, expand, and/or contract the Lessee's 
premises if such relocation, expansion, and/or 
contraction is in the Airport's best interests; 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

96 



Memo to Finance and Labor Committee 

November 3, 1997 Meeting of the Finance and Labor Committee 

(b) permit a change in concept for a facility covered by 
the concession lease if such a concept change is in the 
Airport's best interests (for example, if the Airport's 
passenger profile indicated that there was no longer 
a need for a Unisex Apparel Store, but that there 
was a need for another category of store or 
restaurant); and 

(c) enter into the modifications to the concession lease 
which are necessary to implement such relocations, 
expansions, contractions, and/or changes in concept. 

5. The Budget Analyst recommends that this proposed 
resolution be continued and that the Airport renegotiate 
the proposed modifications with DFS in order to provide 
the Airport with an additional minimum annual 
guarantee payable by DFS to the Airport for the 4,407 
additional square feet to be allocated to DFS to operate an 
Apothecary Store and a Unisex Apparel Store. 

In response to the Budget Analyst's recommendation, Ms. 
Vasquez states that it would be inappropriate for the 
Airport to re-open negotiations with DFS over the 
proposed amendments given that this could jeopardize the 
signing of Lease No. 99-0035 approved by the Board of 
Supervisors on April 5, 1999. Ms. Vasquez states that the 
negotiations have had to address not only revenue issues, 
but also the Airport's desire to provide a range of services 
to the traveling public while dealing with complex retail 
industry and property management practices, within the 
context of a significant drop in sales for the duty free 
industry over the last two years. Ms. Vasquez states that 
DFS will be paying the Airport (a) a minimum annual 
guarantee of at least $261,000,000 over the ten-year term 
of the concession lease, and (b) additional rent from the 
proposed Apothecary and Unisex Apparel Stores. Ms. 
Vasquez states that DFS has agreed to add the 4,407 
square feet for Apothecary and Unisex Apparel Stores to 
its concession lease as a favor to the Airport, given its 
longstanding business relationship and mutual goal of 
offering services to the traveling public. According to Ms. 
Vasquez, DFS's agreement to assume responsibility for 
the additional space is in spite of two issues: (a) DFS will 
not gain any revenue from the Apothecary Store because 
the percentage rent required for this store by the Airport 
from DFS is exactly the same as the percentage rent 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

97 



Memo to Finance and Labor Committee 

November 3, 1997 Meeting of the Finance and Labor Committee 

required by DFS from the subtenant, therefore rendering 
the subtenant's rent payment a direct pass-through to the 
Airport, and (b) both the Apothecary and Unisex Apparel 
Stores are unproven retail concepts with unknown 
revenue potential which the Airport was previously 
unsuccessful in bidding out. 

6. In the professional judgement of the Budget Analyst, 
all retail space at the Airport is commercially valuable 
and, therefore, an upward adjustment of the minimum 
annual guarantee payable by DFS to the Airport for the 
addition of 4,407 square feet to its concession lease is fully 
warranted. 

Recommendation: Continue this proposed resolution and request the Airport 

to renegotiate the proposed modifications with DFS in 
order to provide the Airport with an additional minimum 
annual guarantee payable by DFS to the Airport for the 
4,407 additional square feet to be allocated to DFS to 
operate an Apothecary Store and a Unisex Apparel Store. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

98 




Ahpan 
C— ImIm 

City and County 
of San Francisco 

Wilba L Brown. Jr. 
Mayor 

HenryEBtrman 5° n Francisco I ntern ational Airport 

Prestdwrt ^^? 

Larry Maxzolt gateway to tmi caofic 

Vies President 

Mjch»«! s struruky October 27, 1 999 

Linda S. Craylon 
Caryl ho 

johnlmaat.n l r *Fax(41S-2S2-0461) 
Airport Director Mr. Aian Gibson 

Budget Analyst 

Budget Analyst's Office 

1390 Market Street, Suite 1025 

San Francisco, C A 94 1 02 

Re: Post-Security Master Retail/Duty Free Concession Lease ("Lease") 
Dear Alan: 

Thank you again for your ongoing patience and assistance with this project. Set forth 
below are the answers to your questions of October 27, 1999. 

(a) What is the Airport trying to achieve by providing Apothecary and Unisex 
Apparel Stores? 

By providing an Apothecary Store and Unisex Apparel Store, the Airport is 
achieving the following goals: 

(1) Prevents these stores from being closed when the New International 
Terminal opens; 

(2) Provides a sophisticated variety of retail shopping facilities and avoid 
"cannibalizing" the other facilities; 

(3) Responds to the surveys which show that Airport patrons repeatedly 
request a facility selling drugstore/apothecary products; 

(4) Have in the .Airport clothing products representing San Francisco -based 
manufacturers; and 

(5) Achieves DBE goals. 

DFS will sublease a portion of the space to Donnctta Stafford, a local DBE. for an 
apothecary store. An Esprit store will be operated in the remaining space. Esprit is 
a local San Francisco-based company. Attached is the DBE Subleasing Plan, which 
achieves the 30% DBE goal. 

(b) Why were there no bidders for the proposed Apothecary and Unisex Apparel 
Stores? What particular elements of the bid requirements were deemed too 
restrictive by potential bidders for each store? 



SAW HUNOSCB tffTER^nONAL AIRPORT. PX. BOX 80^ . SAN 1^^ 

99 
TB'd T9t'02S2STt'I6 01 1WOUI 3 A3d SflH-blzS UOHd 8t:<LT &SS1-LZ-120 



Alan Gibson, Budget Analyst 
October 27, 1999 
Page 2 

Set forth below is our understanding of why potential bidders declined to bid on these 
facilities when originally offered: 

( 1 ) It appears that the lease specifications (ie. Minimum Annual Guarantee, 
percentage rent, improvement costs, etc.) were too high. 

(2) Some of the regionally -branded drugstore/apothecary stores stated that the 
facility was too small compared to the size they are used to. 

(3) Prospective bidders advised staff that they did not bid given that the 
concepts were relatively new to the Airport and no one knew their revenue 
potentiaL 

(4) The retail market is strong, and the Airport must compete with other 
locations for strong concessionaires. Many regionally-branded 
drugstore/apothecary stores stated that this location did not fit within their 
business plan of building in local neighborhoods. 

(5) Finally, many concessionaires who might otherwise have bid for these 
facilities were already committed to other Airport projects. 

(c) Why did the DFS Group agree to take over the two retail spaces given that (a) the 
sublease revenue from Donnetta Stafford will be a pass-through, and (b) there is no 
guarantee that they will make a profit from the Unisex Apparel Store. 

The Airport staff requested that DFS take these two additional spaces. Although 
we do not know the reason they were able to accommodate the Airport's request, it 
may relate to DFS's and the Airport's shared goal of creating a sophisticated and 
convenient shopping experience for the travelling public. 

(d) Why did Donnetta Stafford agree to sublease from DFS Group, if she didn't bid 
or wasn't previously prepared to enter into a direct concession agreement with the 
Airport? What has changed in the lease requirements to make the proposition more 
attractive? 

Donnetta Stafford currently has a sublease agreement with DFS, and we understand 
that she is comfortable working with DFS. DFS provides a lot of tenant support for 
smaller operators, such as assistance with tenant build-outs and training. Many 
small operators like the support of a larger operator. 

(e) Please explain Esprit's relationship to DFS Group with regard to the licensing 
agreement for the Unisex Apparel Store - why has Esprit agreed to enter this 
arrangement when it wasn't previously prepared to bid for/enter into (whichever 
applies) a direct concession agreement with the Airport? 

DFS entered into a licensing agreement with Esprit to sell and display Esprit 
merchandise. We understand that in December 1998, when the Airport requested 
bids for the Unisex Apparel Lease, Esprit was undergoing a change of 
management and was timid about venturing into an airport retail venue with which 
they had no experience. Also DFS' experience in Airport retail would provide 
Esprit (and Ms. Stafford) the opportunity to better their retail success. 



20'd T9t702SSSTfI6 01 10 ° 1UJDU S fQQ STH-tlldS UOcU 81 :L\ 666T-.LS-1D0 



rage j ujl j 



Alan Gibsoa, Budget Analyst 
October 27. 1999 
Page 3 

(f) Reasons for not increasing the Minimum Annual Guarantee to reflect the 8 3 
percent increase in revenue-generating retail facility space being leased by the 
DFS Group. 

First, we determined that it does not make sense to apply a Minimum Annual 
Guarantee to these additional facilities given that these concepts are not proven and 
the concessionaires are timid. After receiving no bids on the original packages, 
staff determined that there appears to be a disconnect between Airport desires and 
retailers' business plans. In this context, the Airport determined that percentage 
rent would be appropriate. Again, with the addition of these two facilities, rent 
paid to the Airport will increase. 

Second, even if the Airport were to apply a M\G to these facilities, it does not 
make sense to increase the MAG by 8.3% because most of the current MAG is 
driven by the duty-free facilities, not these types of facilities. Given that the profit 
margins and revenue generation will vary greatly by concept, a pro rata calculation 
of MAG will not work. These facilities would not be able to support a MAG that 
high. 

(g) What are the reasons for allowing the Airport to amend the Lease in Certain 
Respects without prior approval made by the Board of Supervisors? 

Due to the length of the term and complexity of the merchandise mix contained 
within this Lease, the Airport Commission authorized the Airport Director to 
amend the Lease to expand, contract, and relocate the premises and/or change a 
concept, provided the same is in best interests of the City. This authorization 
would minimize the administrative burden on the Airport Commission and the 
Board of Supervisors for minor amendments. For example, if the watch store 
turned out to be a lousy concept, the Airport would like the flexibility to replace 
that facility with a different concept, perhaps one that is more fully-developed in 
two or three years. Of course, the Airport will still subject any such amendments to 
the other applicable City requirements. 

Finally, please recall that although we believe the Airport market is generally strong, we 
only had one bidder on this Lease, DFS. Given that the Airport is the gateway to the City, 
we know you share our goal of creating a positive shopping environment representative of 
San Francisco. We believe that this amendment will do so. 



£0"d T9t?02S2Stfrt6 01 1USU S r&d STS-WIriS UCWd 6T:iT 66£T-^Z-1D0 



Alan Gibson, Budget Analyst 
October 27, 1999 
Page 4 



Per your request, attached is DBE Subleasing Plan. Should you have any additional 
questions, please call me at (650) 794-4500. 



iy yours 





Lorri A. Vasquez 

Assistant Deputy ASfport Director 

Concession Development and Management 



Cc: BobRhoades 
Attachment 

JT:ep/sm 



102 
Wd T9fr0SSS£TM6 01 1WOW S CGd SHB-bldS W08d 61 :L\ 6S6T-<L£-130 



30 "d ItUOl 



Alan GFdsoii, Budget Analyst 
October 27, 1999 
Page 5 



POST-SECURITY MASTER RETAIL/DUTY FREE CONCESSION LEASE 
DBE SUBLEASING PLAN 



DBE Subtenant 


Ethnicity 


Retail Concept 


Square 
Footage 


RDG Concessions 

CalStar Retail, Inc. 

Tan Enterprises, Inc. 

Donnetta Stafford 

Pacific Gateway 
Concessions, LLC 


Afncan Am. 
White 
Asian 

Afncan Am. 
Hispanic 


Sunglasses 
Watches 

Travel Accessories 
Subtotal 

Califomta Gourmet 
Packaged Food 
and Candy 

Subtotal 

Tee Shirts 
Tee Shirts 
Team Sports 

Subtotal 

Travel Accessories 
Leather Goods 
Apothecary 

Subtotal 

Newsstand 
Newsstand 
News & Gift 
News & Gift 
News & Gift 
Packaged Food & 
Candy 

Subtotal 

DBE Sublease Total 
Master Concession Total 
DBE Total 


500 

1,856 

995 


3,351 

1.464 

1,034 


2,498 

300 
354 

1.027 


1,681 

970 

2,053 
1,684 


4,707 

473 
375 
905 
982 
8S2 
1,222 


4,850 

17.087 

57,353 

30% 



S0 - d 



T9H3292STt-I6 



oi 103 iwDw s r&a sns-wi: 



WOHd 0S:iT 66ST-<!Z-1D0 



Memo to Finance Committee 

November 3, 1999 Finance Committee Meeting 

Item 7 - File 99-0852 



Note: The Port has requested that this request for the release of reserved funds 
be tabled by the Finance and Labor Committee. 



Department: 
Item: 



Port 



Hearing to consider the release of $769,103 in reserved funds for 
the Port. 



Amount: 



$769,103 



Source of Funds: Port funds previously appropriated and reserved for the Pier 35 
Cruise Terminal Project. Through an accounting error, the Port 
completed the Pier 35 project using funds specifically 
appropriated by the Board of Supervisors for the Pier 52 Boat 
Ramp Project instead of requesting approval of a release of 
funds previously reserved by the Board of Supervisors for the 
Pier 35 Cruise Terminal Project. 

Description: On May 29, 1995, the Board of Supervisors approved a 

supplemental appropriation for the Port in the amount of 
$2,993,539 (File 101-94-107). Such funds were to be used by the 
Port to fund five capital improvement projects listed below: 



Project 

Pier 35 Cruise Terminal 
Ferry Building Roof 
Pier 70 Upgrades 
Embarcadero Roadway Drainage 
Ferry Building Shear Wall 
Total 



Amount 

$1,391,663 
250,000 
250,000 
700,000 
401.780 

$2,993,443 



The Board of Supervisors amended the proposed ordinance to 
place the entire $2,993,443 on reserve, pending (a) the Port's 
submission of contract cost details and (b) the detailed costs for 
the project work that is to be performed by Port personnel. 

As shown in the table above, the supplemental appropriation 
included $1,391,663 in funding for the Pier 35 Cruise Terminal 
Project. The Port advised at that time that the total estimated 
cost of this project was $1,850,000 or $458,337 more than the 
requested $1,391,663. Expenditures were to be divided between 



Board of Supervisors 

Budget Analyst 
104 



Memo to Finance Committee 

November 3, 1999 Finance Committee Meeting 

Port labor and construction contractors. According to the Port, 
the remaining balance of $458,337 was to be paid for by 
previously appropriated 1984 Port Revenue Bond Funds . 

The Board of Supervisors has previously released 82,217,780 of 
the total $2,993,443 on reserve, including $616,000 for a portion 
of the work to be performed for the Pier 35 Cruise Terminal 
Project. 

Therefore, the balance of funds remaining on reserve is $775,663 
($2,993,443 originally reserved less $2,217,780 released to date). 

Despite the fact that the Port had only obtained approval for 
expenditure of reserved funds in the amount of $616,000, the 
Port is now reporting that the Pier 35 Cruise Terminal Project, 
originally estimated to cost $1,850,000, has been completed at a 
project cost of $1,792,971, using a combination of a construction 
contractor (a joint venture of CICO Construction and R&W 
Concrete Contractors at a cost of $904,566), Port labor 
($550,184) and materials and supplies ($338,221). 

The Port paid for the Pier 35 Cruise Terminal Project with a) 
the $616,000 in reserved funds that had been previously 
released by the Board of Supervisors Budget Committee for the 
Pier 35 Cruise Terminal Project, b) $407,868 in the previously 
appropriated 1984 Port Revenue Bond Funds for the Container 
Terminal Project at Pier 80, and c) $769,103 in funds that had 
been appropriated by the Board of Supervisors for the Pier 52 
Boat Ramp Project and not the Pier 35 Cruise Terminal Project. 

The Port is therefore now requesting a release of funds in the 
amount of $769,103 which were specifically reserved by the 
Board of Supervisors for the Pier 35 Cruise Terminal Project in 
order to reimburse the Pier 52 Boat Ramp Project because the 
Pier 52 project funds were mistakenly expended on the Pier 35 
Cruise Terminal Project. 

Comments: 1. The Attachment to this report is a memorandum from Mr. 

Ben Kutnick, the Port's Director off Finance and 
Administration, providing the Port's explanation for expending 
$769,103 specifically appropriated by the Board of Supervisors 
for the Pier 52 Boat Ramp Project on the Pier 35 Cruise 
Terminal Project instead of requesting that the Board of 



Board of Supervisors 

Budget Analyst 

105 



Memo to Finance Committee 

November 3, 1999 Finance Committee Meeting 

Supervisors release the $769,103 specifically reserved for the 
Pier 35 Cruise Terminal Project. 

The Budget Analyst has concluded that the reason for the 
inappropriate use of funds from another capital project for the 
execution of a construction contract to complete the Pier 35 
project was an intentional alteration of a capital project 
expenditure approval document after its approval by the Port's 
Finance and Administration Division and other Port 
management in order to avoid the need to first obtain approval 
by the Board of Supervisors for the release of the $769,103 in 
reserved funds in order to proceed with the contract approval 
process. 

Also, in the professional judgement of the Budget Analyst, the 
Port's Finance and Administration Division should have clearly 
noted on the expenditure approval form that Pier 35 Cruise 
Terminal Project funding for the construction contract was not 
available until the subject reserve had been released. 

3. According to Mr. Kutnick, the Port's internal controls have 
been strengthened to prevent such acts in the future and that no 
similar problems have been found. 

Recommendation: Table this request for the release of reserved funds as requested 
by the Port. 



Board of Supervisors 

Budget Analyst 
106 



Attachment 



PORT OF SAN FRANCISCO 




f»» <-S 174-128 



MEMORANDUM 

October 29, 1999 



TO: Ken Bruce 

Budget Analyst Office 



y~ 



FROM: Benjamin A. Kutnic; 

Director of Finance fi^Sministrauon 



SUBJECT: Pier 35 Release of Reserve 



I am writing at your request to address the issue of internal controls on capital project funds 
ai the Port of San Francisco related to the Port's use of project funds not intended for the 
Pier 35 project instead of properly requesting a release of reserved funds. 

A Capital Expenditure Approval Form roust be approved by the Port's Finance &. 
Administration Division before the Accounting Department will certify a contract from a 
specific source of funds. My division did in fact sign a request form requesting funds 
appropriated for this project that 'were on reserve assuming that the engineers would request 
make a request for their release through the Port's Governmental Affairs department. 
Subsequent to that approval the project number identifying the source of funding was 
changed. I have a copy of the form as it was approved and a copy of the form after the 
project number was changed. I do not know who made the change or why it was made. 

Since mis haDpened we have tightened the internal controls requiring ail those that originally 
signed the approval form to initial it for any subsequent changes. In addition, in August 
1997 we hired an accountant dedicated to project accounting. We have not had any similar 
problems nor do I expect to. 

Please let me know if you have any questions. 



107 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Item 8 -File 99-1970 

Department: 

Item: 



Description: 



Mayor's Office 

Resolution approving and authorizing the Treasure Island 
Development Authority to extend and modify an existing 
cooperative agreement with the Navy, for the one year 
period from October 1, 1999, through September 30, 2000, 
whereby the Treasure Island Development Authority will 
assume certain responsibilities regarding the operation 
and maintenance of Treasure Island, and the Navy will 
reimburse the Authority for such costs, up to $2.5 million. 

On May 2, 1997, the Board of Supervisors approved 
Resolution No. 380-97, authorizing the Mayor's Treasure 
Island Project Office to establish a nonprofit public 
benefit corporation known as the Treasure Island 
Development Authority (Authority) to act as a single 
entity focused on the planning, redevelopment, 
reconstruction, rehabilitation, reuse and conversion of the 
Treasure Island and Yerba Buena Island (together, the 
Base) for the public interest, convenience, welfare and 
common benefit of the inhabitants of the City. 

In September of 1997, the Navy closed Treasure Island as 
an active naval base. The California Legislature 
subsequently approved the Treasure Island Conversion 
Act of 1997 which designated the Treasure Island 
Development Authority as a trustee of the State 
Tidelands Trust and as the Redevelopment Agency for 
Treasure Island. 

On October 1, 1997, the City entered into a Cooperative 
Agreement with the Navy, with approval from the Board 
of Supervisors, in which the City agreed to assume 
responsibility for (1) operation and maintenance for the 
water, waste water, storm water, electric and gas utility 
systems on the Base, (2) public health, security and safety 
services, (3) grounds and street maintenance and repair, 
(4) property management and caretaker services. The 
Navy agreed to reimburse the City for the costs thereof, 
up to a maximum of $4,000,000, for providing the above 
maintenance, security and other activities to the closed 
naval base for the one-year period from October 1, 1997 



Board of Supervisors 
Budget Analyst 

108 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



through September 30, 1998. According to Ms. 
Annemarie Conroy, Executive Director of the Authority, it 
is the policy of the Navy to fund only those services the 
Navy itself would perform on a closed Naval station. 

Subsequently, the Cooperative Agreement was modified, 
with the approval of the Board of Supervisors (File 98- 
1751) to make the Authority, rather than the City, the 
party to the Cooperative Agreement, and the Cooperative 
Agreement was extended for an additional one-year 
period, from October 1, 1998, to September 30, 1999. 

Attachment I, provided by the Authority, details the 
Authority's budget for FY 1998-1999 and FY 1999-2000. 
According to Ms. Conroy, the Authority's FY 1999-2000 
budget, as previously approved by the Board of 
Supervisors totals $6,775,500. This amount includes 
$1,000,000 in Navy funds, paid to the Authority under the 
Cooperative Agreement, which were carried forward from 
Federal FY 1998-1999, $1,875,000 from Federal FY 1999- 
2000 revenues and $3,900,000 in revenues the Authority 
projects it will earn from special event use permits, 
commercial leases and housing leases. As part of the FY 
1999-2000 budget preparation, the Authority's revenue 
projections were certified by the Controller's Office. 
According to Ms. Conroy, the Authority expects to meet 
this non-Federal revenue budget of $3,900,000 for FY* 
1999-2000. 

Since the Navy will fund only those services that the 
Navy itself would perform on a closed Naval Station, the 
Authority earns the balance of needed revenues from 
revenues realized at the Treasure Island facilities leased 
from the Navy and excluded from the Cooperative 
Agreement funding. The $3,900,000 in non-Federal 
budgeted revenues includes $1,400,000 from special use 
permits (such as weddings, parties and business 
meetings), $1,200,000 from commercial leases (such as 
leases from film and television productions), and 
$1,200,000 from housing leases (per the lease awarded to 
the John Stewart Company by the Authority and 
approved by the Board of Supervisors on February 22, 
1999 - File 99-0126). These revenues fund the cost of 
interim operations including activities related to 

Board of Supervisors 
Budget Analyst 

109 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 

negotiations with the Navy for the transfer of the base to 
the City and long-term planning for the anticipated 
Treasure Island Redevelopment Project. 

The proposed resolution would approve an extension and 
modification to the existing Cooperative Agreement 
between the Navy and the Treasure Island Development 
Authority. As in the existing agreement, the Authority 
would continue to be responsible for (1) operation and 
maintenance for the water, waste water, storm water, 
electric and gas utility systems on the Base, (2) security, 
safety and public health services, (3) grounds and street 
maintenance and repair, (4) property management and 
caretaker services. Under the proposed modification, the 
Navy would reimburse the Authority for the Authority's 
services as noted above, up to a maximum of $2,500,000, 
for the one-year period from October 1, 1999 through 
September 30, 2000. Therefore, the proposed modification 
results in a reduction of $1,500,000 in the reimbursement 
amount paid to the Authority, from $4,000,000 to 
$2,500,000 per Federal Fiscal Year (October 1, 1999, 
through September 30, 2000). 

After the extended term of the Cooperative Agreement 
expires, on September 30, 2000, the Navy has indicated to 
the Authority that it will not renew or extend the 
Cooperative Agreement. According to Ms. Conroy, 
increased lease revenues in future years will compensate 
for the loss of revenue from the Navy under the 
Cooperative Agreement. 

Comments: 1. According to Ms. Conroy, the amount of the 

cooperative agreement is being reduced from $4,000,000 
to $2,500,000, a reduction of $1,500,000, because the land 
area under lease from the Navy to the Authority has 
increased, and the land area under the Cooperative 
Agreement has therefore decreased, necessitating less 
services to be provided by the City on the land not leased 
by the Navy to the Authority. Attachment II is a 
memorandum from the Authority detailing the property 
currently leased from the Navy and the property covered 
by the Cooperative Agreement. Ms. Conroy reports that 
this increase in land leased from the Navy is the latest 
phase in the process of leasing all of the Navy property at 

Board of Supervisors 

Budget Analyst 

110 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Treasure Island to the Treasure Island Development 

Authority. 

2. Ms. Conroy notes that the Authority's budget is 
subject to approval by the Board of Supervisors and that 
most maintenance and other responsibilities in the 
subject Cooperative Agreement wiU be performed by City 
agencies. Services such as pest control, asbestos removal, 
janitorial, and certain machinery repair will be contracted 
to private companies. Attachment III contains a 
description of the services to be provided by the City at 
Treasure Island. 

3. As previously noted, the subject Cooperative 
Agreement would provide reimbursement from the Navy 
to the Authority of up to $2,500,000 for maintenance and 
other expenses. The total FY 1999-2000 budget for the 
Authority, as previously approved by the Board of 
Supervisors, is $6,775,000, or $3,900,000 more than the 
$2,875,000 reimbursement to be paid by the Navy to the 
Authority for maintenance and other activities during FY 
1999-2000. The Cooperative Agreement reimbursement 
amount for FY 1999-2000, $2,875,000, is greater than the 
$2,500,000 amount in the proposed modification to the 
Cooperative Agreement because the first three months of 
the City's FY 1999-2000 are covered by the previous 
Cooperative Agreement. One-fourth of the previous 
Cooperative Agreement payment of $4,000,000 
($1,000,000) and three-fourths of the proposed 
Cooperative Agreement payment of $2,500,000 
($1,875,000) is equal to $2,875,000. 

4. As previously stated, the subject Cooperative 
Agreement is being extended by one year from October 1, 
1999, through September 30, 2000. As such, this 
resolution should be amended to provide for retroactivity. 

5. In summary, the proposed resolution would approve 
the modified Cooperative Agreement, under which the 
Authority would receive $1,500,000 less from the Navy 
than under the previous Cooperative Agreement because 
the land area under lease from the Navy to the Authority 
has increased, and the land area under the Cooperative 
Agreement has therefore decreased. According to the 

Board of Supervisors 

Budget Analyst 

111 



Memo to Finance and Labor Committee 

November 3, 1999 Finance and Labor Committee Meeting 



Authority, however, this reduction will be offset by 
increased revenues derived from the property leased by 
the Navy to the Authority. 



Recommendations: 



1. Amend the 
retroactivity. 



proposed resolution to provide for 



2. Based on a) prior approval by the Board of Supervisors 
of previous Cooperative Agreements, b) the existing plan 
for the Treasure Island Development Authority to lease 
all of the Navy property at Treasure Island, and c) prior 
approval by the Board of Supervisors of the Treasure 
Island Development Authority FY 1999-2000 budget 
which included reduced annual revenue from the Navy 
consistent with this proposed extension and modification 
of the Cooperative Agreement, approve the proposed 
resolution. 




cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Cortroller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakey 



Board of Supervisors 
Budget Analyst 

112 



OCT 27 15=9 15:21 FR CTY 2. CNTY 



ISLNLWlb Zii U*?s3 TO ^i<sk«bl 



P.02/fcJb 

Attachment I 



Revenue Budget 
Special Event Use Permits 
Commercial Leases 
Housing 

Expense Budget 
Public Safety 

Telephone Cable Maintenance 
Grounds Maintenance 
Building &. Street Maintenance 
CA/Personal Property Mgt 
(indudes personnel) 
Utility Maintenance 
Special Events 
Contractual Services 



Revenue Budget 

Spec;al Event Use Permits 
Commercial Leases 
Housing 

Expense Budget 

Telephone Cable Maintenance 
Grounds Maintenance 
Euilding & Street Maintenance 
CA/Personal Property Mgt 
(includes personnel) 
Utility Maintenance 
Special Events 
Contractual Services 







FY 1998- 1999 






FY 98-99 


^on-Cocp. 


Cooperative 


7/1/1998 


10/1/1998 


7/1/1999 


Total Budget 


Agreement 


Agreement 


through 


thru 


thru 


(NonCA + CA) 


Subtotal 


Subtotal 


9/30/1998 


&-30/1999 9/30/19 


5,225,000 


1325,000 
525,000 
1.150.000 

150,000 


4,000,000 


1.000.000 


3,000.000 




5,825,000 


1325,000 


4,000,000 


1,000,000 


3,000,000 


1,000,000 


1395.000 


395.000 


1,500.000 


375.000 


1.125.000 


375.000 


37,500 




37300 





27,500 


12.500 


725,000 


198.000 


527,000 


152.000 


375,000 


125,000 


1338,812 


190.812 


1,148,000 


248.000 


900,000 


300,000 


793339 



575,000 


530.739 


212300 



575,000 


25.000 


187,500 


62,500 





200.000 


375.0C0 


125,000 


38,570 


38,570 










421,879 


421.879 














FY 1999 -2000 






FY 99-00 


Non-Coop. 


Cooperative 


7/1/1999 


10/1/1999 


7/1/2000 


Total Budget 


Agreement 


Agreement 


through 


thru 


thru 


(NonCA ♦ CA) 


Subtotal 


Subtotal 


9/30/1999 


6/30/2000 


9/30/200Q 


6,775,000 


3300,000 
1,400,000 
1300,000 
1.300.000 


2,875,000 


1,000,000 


1375,000 


625,000 


6,775,000 


3300,000 


2375,000 


1,000,000 


1375.000 


625,000 


1,850,133 


1.231,383 


618.750 


375.000 


243.750 


81.250 


50,000 




50.000 


12.500 


37,500 


12.500 


500,000 


187.500 


312.500 


125.000 


157,500 


62.500 


1,710366 


500.516 


1309.750 


300.000 


SO9.7S0 


303L250 


723.875 



24€300 


286375 


437,500 



245.500 


62.500 


375.000 


125.000 





125.000 


121.500 


40.500 


105,820 


105.820 










1388,306 


1.538.305 











Source: Treasure Island Development Authority 



113 



ui_i ^d 1599 14:37 FR CTY 2. CNTY TRSE ISLNB415 274 0299 TO 92520461 

Attachment II 
Page 1 of 2 



To James Edison 

Budget Analyst's OSes 
Fax #252-0461 



10-28-99 Info re Treasure Island's revenue generating leases 

James, here is the info oo TFs leases. I have asked for help in estimating the 
number of acres covered by the housing leases. 



The Treasure Island Development Authority leases Treasure Island buildings and 
facilities from the US Navy for revenue generation to fund interim operations and long 
term planning activities. The Authority leases Treasure Island's Casa de la Vista, ChapeL, 
Fogwatch, Nimitz Conference Center, Great Lawn and Building 180, and Yerba Busna 
Island's Nimitz House principally 2s venues for special events such as weddings, parries, 
picnics and business meetings. Buildings 2 and 3 (built as airplane hangars) are leased 
for movie and television production, and several smaller buildings, such as the former 
base library, are leased to private, for-profit enterprises. Other facilities, such as the fire 
fighting training facility and the brig, are leased to City agencies such as the Fire and 
Sheriffs Departments for their ongoing activities. The Tt marina is leased to Treasure 
Island Enterprises (TIE) for interim marina operations while the Tl Project and TIE 
negotiate the long term development of the marina, 

Housing on the former naval station is leased to the John Stewart Company (JSC) and 
organizations belonging to the Treasure Island Homeless Development Initiative 
(TIHDI). The JSC lease is for 766 units (574 units in phase 1 and 192 units in Phase 2). 
The leases to TIHDI member organi2arions include: 

• Catholic Charities - 30 units 

• Haight Ashbury Free Clinic- 18 units 

• Swords to Plowshares 24 units 

• Walden House 14 units 

The housing leases were approved by the Board of Supervisors in March 1999, .and it is 
the lease of the approximately 70 acres of housing that represents the largest shift in TI 
properties from maintenance responsibilities under the Cooperative Agreement to lease. 
For all leases with the Navy, the Authority must pay Common Area Maintenance (CAM) 
charges of S0.025/per square foot per month for interior space and S0.003 /per square 
foot per month for exterior space. 

Attached is a map that shows the various areas of TI & YI under lease. The areas 
crosshatched in red, which are the housing areas, are about equal to all the other leased 
areas. The areas on TI that remain "without crosshatching" arc the areas that the 
Authority maintains on behalf of the Navy. 



Source: Treasure Island Development Authority 

114 



Fage 2 of 2 




Source: Treasure Island Development Authority 



.Z!^^ ±£- 



tV) StiW X ^d'i&tol) Z^~OVG>/' Attachment III 



Re City Departments operating on TI 



The SFPD provides police services on TI and the SFFD provides fire protection and 
suppression services. DPW bureaus perform most of the building and street maintenance. 
TI streets are not leased by the Authority and are included in the Authority's caretaker 
operations. Similarly maintenance of the TI utility systems (also not leased by the 
Authority) is provided by the SFPUC. The PUC also earns revenues from TI's tenants 
for utility services. At the time of the housing lease, we estimated that the PUC would 
earn about S14 million from TI's residential tenants over the 7-year term of the housing 
lease. 



Source: Treasure Island Development Authority 

116 




City and County of £an Francisco 

MeetingJVlinutes 

Finance and Labor Committee 

Members: Supervisors 1. eland Yee, Sue Merman and Tom Ammiano 
Clerk: Mary Red 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, November 10, 1999 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Sue Bierman, Tom Ammiano. 



Meeting Convened 

The meeting convened at 10:08 a.m. 

992001 [Recreation and Parks Bond Special Election] 

Supervisors Newsom, Kaufman, Leno, Ammiano, Bierman, Yaki, Teng, Becerril, Brown, Katz 

Ordinance calling and providing for a special election to be held in the City and County of San Francisco on 
Tuesday, March 7, 2000, for the purpose of submitting to the voters of the City and County a proposition to 
incur the following bonded debt of the City and County: one hundred ten million dollars ($1 10,000,000) for 
the acquisition, construction and reconstruction of certain improvements to Recreation and Park facilities; 
finding that the estimated costs of such proposed project is and will be too great to be paid out of the ordinary 
annual income and revenue of the City and County and will require expenditures greater than the amount 
allowed therefor by the annual tax levy; reciting the estimated cost of such proposed projects; waiving certain 
requirements of Section 2.31 of the San Francisco Administrative Code relating to the introduction of public 
interest and necessity resolution; fixing the date of election and the manner of holding such election and the 
procedure for voting for or against the proposition; fixing the maximum rate of interest on such bonds and 
providing for the levy and collection of taxes to pay both principal and interest thereof; prescribing notice to 
be given of such election; consolidating the special election with the presidential primary election; establishing 
the election precincts, voting places and officers for the election; and waiving the word limitation on ballot 
propositions imposed by San Francisco Municipal Elections Code Section 510. 
10/25/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Heidi Machen. Supervisor Newsom's Aide; 
Joel Robinson, Acting General Manager, Recreation and Park Department; Elizabeth Goldstein. Director of 
operations. Recreation and Park Department; Supervisor Yee; Supervisor Ammiano; Supervisor Bierman. In 
Support: Isabel Wade, Neighborhood Parks Council; Marybeth Wallace, Parent Advocates for Youth; John 
Rizzo, Sierra Club; Jane Winslow, Chair, Open Space Committee; Josefa Perez; Margaret Brodkin. Coleman 
Advocates; Donna Ursten, Friends of the Park. To Board meeting of November 15. 
RECOMMENDED AS COMMITTEE REPORT by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



DOCUMENTS DEPT. 

NOV 1 6 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 



City and County of San Francisco 



Printed at 12:53 PSt on II/I2A9 



Finance and Labor Committee 



Meeting Minutes 



\,n,mber 10. 1999 



991619 (Establishment of Airport Special Event Account| 

Ordinance amending Administrative Code by adding Section 10. 1 14-3 to establish an Airport Promotion and 
Event Account; allow for the acceptance of gifts by the Airport Commission; and. authorize the Airport 
Commission to expend monies in account (Airport Commission) 

(Fiscal impact; Adds Section 10.1 14-3 ) 

8/17/99, RECEIVED AND ASSK iNI Dtol ilUUCC and I abor Committee 

10/13/99, SUBSTITUTED Substituted b> Airport ( ommusior. 10/13 99, hearing new title 

10/13/99, ASSK rNI I) to Finance and labor Ci.mmitli.-c 

Continued to November 17, 1999. 
CONTINUED by the following vote: 

Ayes: 3 - Yee. Bierman, Ammiano 



991869 (Approving amendment to the Post-Seiurils Master Retail Duty free ( OPCCHJQB I ease for the Vc» 
International Terminal| 

Resolution approving Post-Security Master Retail Duty Free Concession Lease between DFS Group LP and 
the City and County of San Francisco, acting by and through its Airport Commission (Airport Commission) 
9/30/99, RECEIVED AND ASSK ,M I) to I .nance and I abor Committee 
10/22/99, SUBSTITUTED Substituted by Airport Commissi. ..ring new title 

10/22 99.ASSIGNI D to Finance red Labor C wmuiUe e 

1 1 3 99, CONTINUED Heard in Committee Harses Ko-c. Budget Analyst. Peter Nttdoza, Deputy Director. Airport, Supervisor Yee 
Continued to November 10, 

COMIM ED H)( \l I OI lilt < II MK ft) the following \ote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992006 (Six month option to lease Fire Department property at 2350 1 9th Avenue to San Francisco Resource 

Center] 

Mayor 

Resolution granting an option to lease certain City property under the purview of the Fire Commission to a 
nonprofit agenc) 

10 25 99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee Speakers: Harvey Rose. Budget Analyst. Harry ■ Quinn. Real Estate Department. Pam 
David. Mayor's Office of Community Development; Super\-isor Ammiano. Supervisor Yee In Support: Jeffrey 
Chin. S.F. Neighbors Resource Center; Dawning Chung Asian Wellness Center. Richard Calton. Tommy 
Tang. To Board on November 22 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee. Bierman, Ammiano 



City and County of San Francisco 



Printed at 12:53 PM on 11 /2v9 



Finance and Labor Committee 



Meeting Minutes 



Sovember 10, 1999 



992018 [Federal Grant to fund Municipal Railway and Port capital improvement projects including purchases 
of trolley coaches, light rail vehicles, diesel buses and rail replacement] 

Resolution authorizing the Public Transportation Commission to accept and expend SI 13,439,665 of Federal 
Congestion Mitigation and Air Quality Program (CMAQ), Surface Transportation Program (STP), and Section 
5307 Capital Assistance for fourteen Municipal Railway capital projects, and one Port of San Francisco capital 
project, including $3,944,325 for administrative overhead costs. (Public Transportation Commission) 
10/27/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Gail Bloom, Public Transportation 
Commission. To Board meeting of November 15. 
RECOMMENDED AS COMMITTEE REPORT by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



991646 [Interim Controls, LiveAVork] 
Supervisors Ammiano, Bierman 

Resolution imposing Interim Zonmg Controls for a period of eight months to add live/work units to the 
definition of residential use in Article 8, Section 890.88 of the Planning Code; to delete the exemption from 
height limits for live/work units set forth in Planning Code Section 260(b)(2)(O), and to delete live work units 
from the list of other uses set forth in Planning Code Section 227(p) and (q) and include live work units in the 
list of dwellings set forth in Section 215; adopting findings pursuant to Planning Code Section 101.1. 
8/23/99, ASSIGNED UNDER 30 DAY RULE to Finance and Li3or Committee, expires on 9/22/1999. 8/31/99 - Transmitted to the 
Director of Planning for environmental review, pursuant to Section 306.7(c) of the Planning Code. 

10/6/99 - From Planning Department. Certificate of Determination of Exemption Exclusion from Environmental Review dated 10/4/99. 
10/8/99, SUBSTITUTED. Substituted by the City Attorney bearing new title, 10/8/99. 

10/8/99, ASSIGNED to Finance and Labor Committee. With request this item be calendared for the October 20, 1999 meeting. 
10/20/99, CONTINUED TO CALL OF THE CHAIR. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



990652 [Paramedic Services) 

Supervisors Yee, Newsom 

Hearing to consider the cost of transferring paramedic services from the Health Department to the Fire 

Department. 

4/5/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

10/6/99, CONTINUED TO CALL OF THE CHAIR. 

10/27/99, CONTINUED. Continued to November 10, 1999. 

Heard in Committee. Speakers: Haney Rose. Budget Analyst: Anne Kronenberg, Department of Public 

Health: Christine Wachsmuth, RN, MS, Administrator. Emergency Response, S.F. General Hospital: Dr. John 

Brown, Director, Emergency Senices; Chief Robert Demmons, Fire Department: Dr. Marshal Isaacs. Fire 

Department: Russell McCallian, Chief of Operations, Fire Department: Richard Shorthall, Chief, Emergency 

Services; Debra Ward, Chief Financial Officer, Fire Department: Supervisor Yee; Ken Bruce. Budget 

Analyst's Office; Supervisor Bierman; Mark Hayes, Local 798, Firefighters' Union. 

FILED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



City and County of San Francisco 



Printed at 12:53 PM on 1 1/12/99 



Finance and Labor Committee Meeting Minuta \a\ ember 10, 1999 



991941 |Fire Department Overtime (Expenditures] 
Supervisor Yee 

Hearing to consider the Fire Department overtime expenditures. 
10/12/9'), RECEIVED AND ASSIGNED to Finance ami Labor Committee 

10/27/99, CONTINUED Continued to November 10, 1999. 

Heard in Committee Speakers Harvey Ruse. Budget Analyst, Debra Ward, Chief Financial Officer, Fire 

Department. Ken Bruce. Budget Analyst's Office, Ed Harrington, Controller. Mark Hayes, Local 798, Frank 
Martinez. Local 790; Jim Corrigan, Chief Robert Demmons, Fire Department, Supervisor >< i 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



991334 (Graduation Memorabilia| 
Supervisor Yee 

Hearing to investigate the San Francisco I ntlicd School bid process for graduation memorabilia. 
7/6/99. RECTI \ I D \M> tSSIGNl I) to finance and labor Committee 

I lean! in Committee Speakers Supervisor Yee. Sarah Pearce, student Lowell High School; John Quinn. 
Assistant Superintendent oj Schools. John Mahone) I ISistant Principal Low ell High School; Supervisor Yee. 
FILED by the following \ote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



ADJOURNMENT 

The meeting adjourned at 12 40 p m 



City and County of San Francisco 4 Printed ai 12:53 P\t on 1I12V<> 



Public Library,Gov't Info. Ctr., 5 th Fir. 
Attn: Susan Horn 

$Sk& documents dept. 

CITY AND COUNTY ¥$MMtJzj OF SAN FRANCI SCO 

, ^SsW N0V ° 9 1999 

^OARD OF SUPERVISORS SAN FRANCISCO 

PUBLIC LIBRARY 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

November 5, 1999 DOCUMENTS DEPT 
TO: .^Finance and Labor Committee iuqu n n jnqq 

FROM: .Budget Analyst SAN FRANCISCO 

PUBLIC LIBRARY 
SUBJECT: November 10, 1999 Finance and Labor Committee Meeting 

Item 1 - File 99-2001 

Department: Recreation and Park Department 

Item: Ordinance calling and providing for a special election to 

be held in the City and County of San Francisco on 
Tuesday, March 7, 2000, for the purpose of submitting to 
the voters of the City and County of San Francisco a 
proposition to incur bonded indebtedness of the City and 
County in the amount of $110,000,000 for the acquisition, 
construction and reconstruction of certain improvements 
to Recreation and Park Facilities; finding that the 
estimated cost of such proposed project is and will be too 
great to be paid out of the ordinary annual income and 
revenue of the City and County and will require 
expenditures greater than the amount allowed therefor by 
the annual tax levy; reciting the estimated cost of such 
proposed project; waiving certain requirements of Section 
2.31 of the San Francisco Administrative Code relating to 
the introduction of public interest and necessity 
resolution; fixing the date of election and the manner of 
holding such election and the procedure for voting for or 
against the proposition; fixing the maximum rate of 
interest on such bonds and providing for the levy and 
collection of taxes to pay both principal and interest 
thereof; prescribing notice to be given of such election; 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

consolidating the special election with the Presidential 
Primary Election; establishing the election precincts, 
voting places and officers for the election; and waiving the 
word limitation on ballot propositions imposed by San 
Francisco Municipal Elections Code Section 510. 

Description: The State General Obligation Bond Law requires that, in 

order for the City to issue General Obligation Bonds, a 
resolution of public convenience and necessity must first 
be adopted by a two-thirds vote of the Board of 
Supervisors, and the proposed bonds must then be 
approved by two-thirds of the electorate. On October 25, 

1999, the Board of Supervisors approved a resolution 
declaring that the public interest and necessity demand 
the acquisition, construction and reconstruction of certain 
improvements to Recreation and Park facilities by the 
City and County (File 99-1769). 

The proposed ordinance would provide for a Special 
Election to be held and consolidated with the Presidential 
Primary Election scheduled to be held on March 7, 2000, 
in order to submit to the voters a proposition to incur 
bonded indebtedness of the City and County, in the 
principal amount of $110,000,000, for the acquisition, 
construction and reconstruction of certain improvements 
to Recreation and Park facilities. 

The proposed $110,000,000 General Obligation Bond 
Issue for the Recreation and Park Department would be 
issued over a five-year period, beginning in October of 

2000, to provide $110,000,000 of the estimated total 
projects costs of $380,000,000 for the renovation and 
construction of Recreation and Park Department 
facilities. The balance of $270,000,000 ($380,000,000 less 
$110,000,000) will be provided from the funding sources 
detailed in the Attachment, provided by Ms. Elizabeth 
Goldstein of the Recreation and Park Department. Such 
funding sources are contingent on approval of Charter 
Amendments, State voter approval, Congressional 
approval and private donations. 

According to the Bond Program Report, provided by Ms. 
Goldstein, the bond funds will be used for the general 
rehabilitation and/or replacement of deteriorated 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

2 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

Recreation and Park Department facilities. Specifically, 
the bond program will provide funding for the 
improvement of major recreation centers and clubhouses, 
pools, restrooms, playgrounds, park infrastructure, 
landscape, reforestation and erosion control, courts and 
pla3dng fields, and land acquisition. 

Budget: The total cost of all the proposed projects is estimated to 

be approximately $380,000,000. The Attachment 

provided by the Recreation and Park Department is a 
memorandum which contains the estimated costs of each 
of the capital improvement projects totaling $380,000,000, 
as well as each of the funding sources to pay for the 
project, including the subject request of $110,000,000 in 
General Obligation Bonds. This memorandum also 
identifies the status of each of these funding sources. 

Comments: 1. According to Ms. Laura Bordelon of the Mayor's Office 

of Public Finance, the City Charter provides for a legal 
debt limit of three percent of net assessed property value. 
The Mayor's Office of Public Finance has calculated the 
City's Debt Limit Ratio as follows: 

Total Debt Limit for FY 1999-2000 $2,114,446,916 
Estimated Outstanding General Obligation 

Bonds as of June 30, 1999 967.925.000 

Remaining General Obligation Capacity $1,146,521,916 

However, it should also be noted that the Laguna Honda 
Hospital General Obligation Bond measure for 
$299,000,000 is on the November 2, 1999, ballot, which if 
approved by the voters would further reduce the City's 
remaining General Obligation bonding capacity to 
$847,521,916. 

2. If the subject bond issue of $110,000,000 proposed for 
the March 7, 2000, ballot were to be approved by voters, 
and all $110,000,000 in bonds were issued in FY 1999- 
2000, the remaining General Obligation bonding capacity 
would be $737,521,916. However, pursuant to the 
proposed plan of the Recreation and Park Department, 
Ms. Bordelon advises that the Recreation and Park 
Department bonds are anticipated to be sold in five 
separate issuances, within approximately five years after 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

3 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 



approval, thus allowing for a slightly larger General 
Obligation bonding capacity to remain until the 
subsequent bonds are sold. According to Ms. Bordelon, 
the amount of debt that could be issued in any given year 
is partly a function of the level of payments on existing 
debt, which fluctuates as older bond issues are retired and 
new bonds are issued. 

File 99-1964 is another ordinance providing for a special 
election on March 7, 2000, passed by the Board of 
Supervisors on first reading, which would result in the 
City's incurring $87,445,000 of General Obligation Bonds 
for the California Academy of Sciences. If that 
$87,445,000 Academy of Sciences General Obligation 
Bond measure is also approved, and all $87,445,000 in 
bonds were issued in FY 1999-2000, it would further 
reduce the City's General Obligation bonding capacity to 
$650,076,916. 

3. According to Ms. Bordelon, assuming the bonds are 
issued in an interest rate environment that reflects the 
norms for the past ten years, the proposed bonds would 
bear a true interest cost of 6.0 percent. It is anticipated 
that there will be five separate bond issuances, 
$20,000,000 in October of 2000, $25,000,000 in October of 
2001, $35,000,000 in October of 2002, $15,000,000 in 
October of 2003 and $15,000,000 in October of 2004. 
Upon issuance of the entire $110,000,000, the average 
annual debt service would be approximately $9,627,175 
and the total debt service would be $192,543,500 for the 
proposed 20-year bond period. 

4. According to Ms. Ann Carey of the Controller's Office, 
if $110,000,000 in bonds were to be issued, the bonds 
would result in an increase in the Property Tax rate of 
approximately $0.01420 per $100 of assessed value. At 
this rate, the owner of a single-family residence assessed 
at $400,000, assuming the $7,000 homeowner's 
exemption, would pay an average of $55.81 in additional 
annual Property Taxes beginning in FY2000-2001. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 



5. As shown in the Attachment provided by the 
Recreation and Park Department, the $270,000,000 in 
other funding sources needed for this project are 
contingent on approval of Charter Amendments, State 
voter approval, Congressional approval and private 
donations. Ms. Goldstein reports that any shortfall in 
such anticipated funding sources will result in a reduction 
of the project, and that to the extent such funds are not 
received, the project will be scaled back. 

6. The proposed ordinance would waive any and all of the 
requirements set forth in Section 2.31 of the City's 
Administrative Code relating to the timely introduction of 
public interest and necessity resolutions that are or may 
become applicable to actions of the Board of Supervisors 
necessary for the submission of this proposition. 
According to Mr. David Sanchez of the City Attorney's 
Office, this provision is necessary because the deadline 
date was September 20, 1999, for the introduction of the 
resolution determining and declaring the public interest 
and necessity for the Recreation and Park Department 
capital improvements at an estimated cost of 
$110,000,000 for the March 7, 2000, ballot (File 99-1769). 
However, Mr. Sanchez notes that this resolution was not 
introduced on September 20, 1999, because the Board of 
Supervisors did not meet on that date due to the Jewish 
holiday of Yom Kippur. Mr. Sanchez advises that the 
resolution was, however, introduced on the following day, 
September 21, 1999, when the Board of Supervisors 
convened. 

7. The proposed ordinance would also waive the word 
Limit for ballot propositions imposed by the San Francisco 
Municipal Elections Code Section 510. According to Ms. 
Naomi Nishioka of the Department of Elections, in 
accordance with the local Elections Code, the current 
word limit for such ballot propositions is 30 words. The 
Budget Analyst notes that the proposed ordinance 
currently contains 37 words, or seven words more than 
the limit. Ms. Nishioka reports that it is not uncommon 
for General Obligation Bond measures to exceed the word 
limits imposed by the local Elections Code. Although the 
proposed $110,000,000 Recreation and Park Department 
General Obligation Bond measure exceeds the local 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

Elections Code word limit, Mr. Nisbioka advises that it is 
not likely to result in any significant impacts on the cost 
of the election. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



P.ai-k Renaissance 



4-15 S3! 20SS 



10/1<V99 02:27p P . 002 



Attachment 
Page I of 3 



City and County of San Francisco 



Recreation and Park Department 




October 14, 1999 



Mr. James Edison 

Office of Harvey Rose 

3udget Analyst 

Fox Plaza 

1390 Market, Suite 1025 

San Francisco, CA 941 02 

Dear Mr. Edison: 



You requested additional information regarding the potential sources of funds that wc 
have identified in our application for the park bond The potential uses and sources of the 
funds arc outlined in the attached tables. It is important to note thai these tables refer to die 
Department's total projected capital need based a scries of studies and conditions 
investigations done over the last few years. 

The following is the status of the various funding sources referred to in the tabic of 
potential sources of funds. 

Open Space Fund: Charter section 16.107 sets aside an amount equal to .025 cents for every 
SI 00 assessed valuation from the annual tax levy to be deposited into the Fund. Tnc fund 
currently reaps the Department approximately $16 million annually from property taxes. 
Charter section 16.107 is due to sunset in fiscal year 2004-05. Supervisor Gavin Nevvsom 
introduced a Charter amendment to be piaced on the March 2000 ballot, at the Board oL' 
Supervisors on October 12 to extend the Open Space Fund for 30 years. (See Charter 
Amendment language - section (b)- page 2.) Tne Open Space Fund currently supplies the 
only steady source of capital and land acquisition funding that the Department receives. The 
fund also supports other programs such as the Natural Areas Management Program, 
Community Gardens and After-School Programs. The Charter amendment would allow the 
Department to dedicate new or enhanced revenues to these programs. As the Open Space 
Fund grows and Department revenues grow, we anticipate increasing the amount spent out of 
the Fund for capital and land acquisition purposes. 

State Funding: The State Legislature has passed, and the Governor has signed, a bond 
package entided the Villaraigosa-Keeley Urban Parks, Clean Water, and Coastal Protection 
Bond Act of 2000. This bond proposal goes before the electorate in March, 2000. Tnc State 
bond package includes a competitive municipal grant program of S500 rnillion. Most of the 
urban parks funding is targeted for the state's densest cities, including San Francisco. It also 



McLaren Lodge, Golden Gate Park 

501 Stanyan Street 

San Francisco, CA 94117-1898 



Phone:(415)831-2779 
Fax: (415) 831-2096 



Attacnmenc 

Park Renaissance 4-1S S31 2293 1B/14/SS B2 : 27P P.ZZ3 Page '^ O^ — ^ 



includes a. specific allocation for Golden Gate Park of SI 5 million. We have conservative: y 
estimated that we will be able to win S30 million from this bond. This estimate is based or. the 
various program categories that the City would be eligible for and a general apportioning 
throughout the srr'.e. A less conservative estimate migh: be $50-60 million. 
In addition to the Slate Park bond program, the State has a number of granting programs that 
the Department is eligible for. For ir-stance, we currently have three grants before the 
California Coastal Conservancy for almost SI million. We have received positive fee.. 
on these proposals and anticipate some resolution by eariy in the calendar year. 

Federal Funding: Tne Land and Water Conservation Fund was created by Congress several 
decades ago. It dedicates ofT-shore oil revenues to a number of environmental and park- 
related programs. However, over the iast decade or so Congress has authorized very linle 
funding for park purposes. Congress is currently considering several pieces of legislaticr. thai 
would increase the money flowing through the program. One of the major eiements is an 
enhanced municipal granting program that would come tnrough the states. In the past, San 
Francisco has been the recipient of funds from the Land and Water Conservation Fund. We 
anticipate passage of one of these pieces of legislation in the next month or so. 

Revenue and Lcu.sc Bonds: If passed by the voters the amendment to Charter section 1 6.107 
allows the 3oard of Supervisors to authori7.e the issuance of revenue bonds or other 
instruments of indebtedness. (Please Charter Amendment language - Section (d) on page 3.) 
This capacity would be used in those instances when key capital needs such as land 
acquisition or a specific capital project outstrips the bond or other Open Space funding 
available. 

Private Donations: The Friends of Recreation and Park currently raises 53.5 million a year 
for park projects. Tne S40 million goal for private donations represents an annual goal of S4 
million over current actuals. The Conservatory of Flowers and other recent effort have civen 
the Department and the Friends confidence that these goals are achievable. 

T hope this uiforrnation is helpful Please let me know if you have any additional questions. 




^Eiizabcth Goldstein 
Director of Operational and Physical Planning 



•5-15 SSI 2C 



Z2. : 2T7P P . 0O4 



---ttacnmen' 
r'a.ee 3 of 



Capital Needs* 

Bui] dings 

Clubhouses (40) S 39.6 

Pools (7) 35 5 

Recreation Centers (14) " 107.3 

Subtotal S178.0 

Parks A 

Neighborhood Parks (105) S1C4.0 

Major Parte (49) 48.0 

Subtotal • . - S152.0 



Golden Gate Park 
Total 



S 50.0 
538Q.0 



•In millions of dollars 
-Over ten year period. 
A Urban forestry is included as work item in other casegorie 



Potential Sources of Funds for Capital 


Needn- 


Open Space Fund (SIS/year) 


S150.0 


State Funding 


3O.0 


Federal Funding (L&WCF) 


30.0 


GO 3ond 


11O.0 


Revenue or Lease Bond 


20X 


Private Donations 


^0.0 


Total 


5380-0 


•In millions of dollars 




-i-Over ten year period. 


■ 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

Item 2 - File 99-1619 



Department: 
Item: 



Comment: 



Airport 

Ordinance amending Article XIII, Chapter X of the 
Administrative Code by adding Section 10.114-3 to establish a 
new Special Account known as the "Airport Promotion and 
Event Account"; to authorize the Airport Commission to accept 
cash donations, property, and personal services which would 
accrue to the Special Account; to authorize the Airport 
Commission to expend monies from the Special Account; to 
carry over unexpended monies in the Special Account from one 
fiscal year to the next; and to require quarterly reports to the 
Board of Supervisors on revenues to, and expenditures from, 
the Special Account. 

The Chair of the Finance and Labor Committee, in 
consultation with the Airport, has requested that this item be 
continued for one week. 



Recommendation: In accordance with the Comment above, continue the proposed 
ordinance for one week. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

10 



Memo to Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

Item 3 - File 99-1869 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 3, 1999. 



Department: 
Item: 



Location: 



Lessor: 



Airport 

Resolution authorizing modifications to Lease No. 99- 
0035 between the DFS Group L.P. and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

New International Terminal Building (ITB) of the Airport 

City and County of San Francisco, acting by and through 
its Airport Commission 



Lessee: The DFS Group L.P., a Delaware limited partnership 

("DFS") 
Effective Date of 
Lease Modifications: May of 2000 



Description: 



The Airport and DFS have negotiated Lease No. 99-0035 
for "post-security" retail spaces which are located beyond 
the security checkpoints in the new ITB. The subject ten- 
year concession lease, which has yet to be signed but 
which is due to commence at the opening of the new ITB 
in May of 2000 and to expire in May of 2010, would cover 
52,946 square feet at 27 locations in the new ITB 1 . This 
lease was approved by the Board of Supervisors on April 
5, 1999 (Resolution No. 283-99). Under the subject 
concession lease, DFS would be responsible for both the 
direct provision of duty free 2 retail stores and the 
subleasing of non-duty free 3 retail stores. The table 
included in the Attachment to this report provided by the 
Airport lists (a) DFS's proposed subtenants, (b) each 
subtenant's Disadvantaged Business Enterprise (DBE) 
status, (c) the retail facilities each subtenant would 
provide, and (d) the square footage of each subleased 
space. These subtenants would occupy a total of 17,087 



1 Ms. Lorri Vasquez of the Airport states that the reference in Lease No. 99-0035 to a total of 
51,914 square feet was based on approximate figures which have since been revised so that 
the approximate total space covered by the existing lease is actually 52,946 square feet. 

2 "Duty free" merchandise is defined as goods sold without taxation to international travelers 
for consumption outside of the United States of America. 

3 "Non-duty free" merchandise is defined as goods that are taxed at the point of sale. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

square feet, or 30 percent of the total 57,353 square feet 
designated under the DFS concession lease. 

The proposed resolution would modify- the concession 
lease between DFS and the Airport as follows: 

(1) The addition of 4,407 square feet of "pre-secunty" 
retail space, which increases the total amount of 
space covered by the subject concession lease from 
52,946 square feet in 27 locations to 57,353 square 
feet in 29 locations in the new ITB. The additional 
4,407 square feet of space is located before the 
security checkpoints in the new ITB, for two 
additional retail locations: (a) an 1,684 square foot 
Apothecary Store, which would sell various items sold 
in a standard drugstore, and (b) a 2,723 square foot 
Unisex Apparel Store, which would sell casual 
clothing. These two stores would have a five year 
term from May of 2000 to May of 2005 which the 
Airport can extend by one additional five year 
extension term for either or both stores. 



Comments: 



(2) Delegation to the Airport, pursuant to Section 1.2 of 
the concession lease, of the ability to modify the 
future size and usage of the retail space being leased 
to DFS without subsequent Board of Supervisors 
approval. 

1. The concession lease would require DFS to pay the 
Airport the greater of the two following amounts in rent: 
either (a) a minimum annual guarantee of 526,100,000 
which can be increased annually according to composite 
changes in the Consumer Price Index and passenger 
traffic, as set out in the concession lease, or (b) a 
percentage of annual gross revenues which is calculated 
on the following basis: 



Annual Gross Revenues 

Up to and including $50,000,000 
S50,000,000.01 - $100,000,000 
Over $100,000,000 



Dutv Free Non-Dutv Free 



15% 
20% 
25% 



12% 
14% 
16% 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

By comparison to the above noted minimum annual 
guarantee of $26,100,000, in FY 1998-99 DFS paid the 
Airport $20,700,000 in rent, according to Mr. Peter 
Nardoza of the Airport. 

2. Under the proposed modifications to the previously 
approved DFS concession lease, which would provide 
4,407 additional square feet for an Apothecary Store and 
a Unisex Apparel Store, DFS would not pay an additional 
minimum annual guarantee to the Airport. DFS would 
only be required to pay the Airport rent for those stores 
on the basis of a percentage of annual gross revenues, 
calculated as follows: 



Annual Gross Revenues Percentage Rent 

Up to and including $500,000 12% 

$500,001 up to and including $1,000,000 14% 

Over $1,000,000 16% 



3. DFS would sublease the Apothecary Store retail space 
to Ms. Donnetta Stafford, a DBE owner who has already 
entered into two subleases with DFS for a Travel 
Accessories Store and a Leather Goods Store at the new 
ITB. Ms. Stafford also subleases retail space from DFS 
for a "health and herb concept" store in the existing 
International Terminal which sells some merchandise 
that is comparable to the merchandise which would be 
sold through her Apothecary Store in the new ITB. 

DFS would operate the Unisex Apparel Store retail space 
under a licensing agreement with Esprit. According to 
Ms. Vasquez, the Unisex Apparel Store would be the first 
single brand unisex apparel store in the Airport. 

4. Under the proposed modification to Section 1.2 of the 
concession lease, the Airport would be authorized to make 
the following changes to the concession lease, without 
subsequent approval from the Board of Supervisors: 

(a) relocate, expand, and/or contract the Lessee's 
premises if such relocation, expansion, and/or 
contraction is in the Airport's best interests; 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

(b) permit a change in concept for a facility covered by 
the concession lease if such a concept change is in the 
Airport's best interests (for example, if the Airport's 
passenger profile indicated that there was no longer 
a need for a Unisex Apparel Store, but that there 
was a need for another category of store or 
restaurant); and 

(c) enter into the modifications to the concession lease 
which are necessary to implement such relocations, 
expansions, contractions, and/or changes in concept. 



5. The Budget Analyst recommends that the Airport 
renegotiate the proposed modifications with DFS in order 
to provide the Airport with an additional minimum 
annual guarantee payable by DFS to the Airport for the 
4,407 additional square feet to be allocated to DFS to 
operate an Apothecary Store and a Unisex Apparel Store. 

In response to the Budget Analyst's recommendation, Ms. 
Vasquez states that it would be inappropriate for the 
Airport to re-open negotiations with DFS over the 
proposed amendments given that this could jeopardize the 
signing of Lease No. 99-0035 approved by the Board of 
Supervisors on April 5, 1999. Ms. Vasquez states that the 
negotiations have had to address not only revenue issues, 
but also the Airport's desire to provide a range of services 
to the traveling public while dealing with complex retail 
industry and property management practices, within the 
context of a significant drop in sales for the duty free 
industry over the last two years. Ms. Vasquez states that 
DFS will be paying the Airport (a) a minimum annual 
guarantee of at least $261,000,000 over the ten-year term 
of the concession lease, and (b) additional rent from the 
proposed Apothecary and Unisex Apparel Stores. Ms. 
Vasquez states that DFS has agreed to add the 4,407 
square feet for Apothecary and Unisex Apparel Stores to 
its concession lease as a favor to the Airport, given its 
longstanding business relationship and mutual goal of 
offering services to the traveling public. According to Ms. 
Vasquez, DFS's agreement to assume responsibility for 
the additional space is in spite of two issues: (a) DFS will 
not gain any revenue from the Apothecary Store because 
the percentage rent required for this store by the Airport 
from DFS is exactly the same as the percentage rent 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

required by DFS from the subtenant, therefore rendering 
the subtenant's rent payment a direct pass-through to the 
Airport, and (b) both the Apothecary and Unisex Apparel 
Stores are unproven retail concepts with unknown 
revenue potential which the Airport was previously 
unsuccessful in bidding out. 

6. In the professional judgement of the Budget Analyst, 
all retail space at the Airport is commercially valuable 
and, therefore, an upward adjustment of the minimum 
annual guarantee payable by DFS to the Airport for the 
addition of 4,407 square feet to its concession lease is fully 
warranted. 



Recommendation: Continue this proposed resolution and request the Airport 

to renegotiate the proposed modifications with DFS in 
order to provide the Airport with an additional minimum 
annual guarantee payable by DFS to the Airport for the 
4,407 additional square feet to be allocated to DFS to 
operate an Apothecary Store and a Unisex Apparel Store. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



rage i of 5 



»»>(«1 




Cay md County 
e\ Sin Frincsco 

Willi* L Brown. Jt. 
M»yor 

Henry e. B«rm«n San Francisco I ntern ational Airport 

Prswoem Sp 

Larry Maaolt GATTWay to txi panne 

Vica Pr*siiam 

Mieh»ti s. stmruky October 27,1 999 

bndi S. Crayion 
Cjryl tio 

.ohnl martin Via Fax (41 S-2 5 2-04 61) 

Aurporr oir»oar Mj-. Alan Gibson 
Budget Analyst 
Budget Analyst's Office 
1390 Matkct'street, Suite 1025 
• San Francisco, C A 94 1 02 

Re: ' Post-Security Master Retail/Duty Free Concession Lease ("Lease") 

Dear Alan: 

Tbank you again for your ongoing patience and assistance with this project Set forth 
below are the answers to your questions of October 27, 1999. 

(a) What is the Airport trying to achieve by providing Apothecary and Unisex 
Apparel Stores? 

By providing an Apothecary Store and Unisex Apparel Store, the Airport is 
achieving the following goals: 

(1) Prevents these stores from being closed when the New International 
Terminal opens; 

(2) Provides a sophisticated variety of retail shopping facilities and avoid 
"cannibalizing" the other facilities; 

(3) Responds to the surveys which show that .Airport patrons repeatedly 
request a facility selling drugstore/apothecary products; 

(4) Have in the .Airport clothing products representing San Francisco-based 
manufacturers; and 

(5) Achieves DBE goals. 

DFS will sublease a portion of the space to Donnctra Stafford, a local DBE, for an 
apothecary store. .An Esprit store will be operated in the remaining space. Esprit is 
a local San Francisco-based company. Attached is the DBE Subleasing Plan, which 
achieves the 30% DBE goal. 

(b) Why were there no bidders for the proposed Apothecary and Unisex Apparel 
Stores? What particular elements of the bid requirements were deemed too 
restrictive by potential bidders for each store? 



SAN FRANCISCO INTBtfWTlONAI. AIRPORT- P.O. BCX 8CS7 . SAN FRANCISCO CALIFORNIA ii'.Ti - TELEPHONE 1650', 75*- 5000 - FAX I6S3I 794-OT5 

T.0"d T9t7BZS2STt't6 ig JLUSU 2 r\3Q snE--bIdS WCiid BI:£1 655T-ZZ-1D0 



Alan Gibson, Budget Analyst 
October 27, 1999 " 
Page! 

Set forth below is our understanding of why potential bidders declined to bid on these 
facilities when originally offered: 

(1) It appears that the lease specifications (ie. Minimum Annual Guarantee, 
percentage rent, improvement costs, etc.) were too high. 

(2) Some of the regionally-branded drugstore/apothecary stores stated that the 
facility was too small compared to the size they are used to. 

(3) Prospective bidders advised staff that they did not bid given that the 
concepts were relatively new to the Airport and no one knew their revenue 
potential. 

\(4) The retail market is strong, and the Airport must compete with other 
locations for strong concessionaires. Many regionally-branded 
drugstore/apothecary stores stated that this location did not fit within their 
business plan of building in local neighborhoods. 
(5) Finally, many concessionaires who might otherwise have bid for these 
facilities were already committed to other Airport projects. 

(c) Why did the DFS Group agree to take over the two retail spaces given that (a) the 
sublease revenue from Donnetta Stafford will be a pass-through, and (b) there is no 
guarantee that they will make a profit from the Unisex Apparel Store. 

The Airport staff requested that DFS take these two additional spaces. Although 
we do not know the reason they were able to accommodate the Airport's request, it 
may relate to DFS's and the Airport's shared goal of creating a sophisticated and 
convenient shopping experience for the travelling public. 

(d) Why did Donnetta Stafford agree to sublease from DFS Group, if she didn't bid 
or wasn't previously prepared to enter into a direct concession agreement with the 
Airport? What has changed in the lease requirements to make the proposition more 
attractive? 

Donnetta Stafford currently has a sublease agreement with DFS, and we understand 
that she is comfortable working with DFS. DFS provides a lot of tenant support for 
smaller operators, such as assistance with tenant build-outs and training. Many 
small operators like the support of a larger operator. 

(e) Please explain Esprit's relationship to DFS Group with regard to the licensing 
agreement for the Unisex Apparel Store - why has Esprit agreed to enter this 
arrangement when it wasn't previously prepared to bid for/enter into (whichever 
applies) a direct concession agreement with the Airport? 

DFS entered into a licensing agreement with Esprit to sell and display Esprit 
merchandise. We understand that in December 1998, when the Airport requested 
bids for the Unisex Apparel Lease, Esprit was undergoing a change of 
management and was timid about venturing into an airport retail venue with which 
they had no experience. Also DFS' experience in Airport retail would provide 
Esprit (and Ms. Stafford) the opportunity to better their retail success. 



20"d T9fr0S£ZSifrt6 1WDU1 S CSQ Sfie-W I dS WOyj 8X:iT 666T-ic-lD0 



Paee 3 of 5 



Alan Gibson, Budget Analyst 
October 27, 1999 
Page 3 

(f) Reasons for not increasing the Minim um Annual Guarantee to reflect the 8 3 
percent increase in revenue-generating retail facility space being leased by the 
DFS Group. 

First, we determined that it does not make sense to apply a Minimum Annual 
Guarantee to these additional facilities given that these concepts are not proven and 
the concessionaires are timid. After receiving no bids on the original packages, 
staff determined that there appears to be a disconnect between Airport desires and 
retailers' business plans. In this context, the .Airport determined that percentage 
. rent would be appropriate. Again, with the addition of these two facilities, rent 
paid to the Airport will increase. 

Second, even if the Airport were to apply a MAG to these facilities, it does not 
make sense to increase the MAG by 8.3% because most of the current MAG is 
driven by the duty-free facilities, not these types of facilities. Given that the profit 
margins and revenue generation will vary greatly by concept, a pro rata calculation 
of MAG will not work. These facilities would not be able to support a MAG that 
high. 

(g) What are the reasons for allowing the Airport to amend the Lease in Certain 
Respects without prior approval made by the Board of Supervisors? 

Due to the length of the term and complexity of the merchandise mix contained 
within this Lease, the Airport Commission authorized the Airport Director to 
amend the Lease to expand, contract, and relocate the premises and/or change a 
concept, provided the same is in best interests of the City. This authorization 
would minimize the administrative burden on the Airport Commission and the 
Board of Supervisors for minor amendments. For example, if the watch store 
turned out to be a lousy concept, the Airport would like the flexibility to replace 
that facility with a different concept, perhaps one that is more fully-developed in 
two or three years. Of course, the .Airport will still subject any such amendments to 
the other applicable City requirements. 

Finally, please recall that although we believe the Airport market is generally strong, we 
only had one bidder on this Lease, DFS. Given that the Airport is the gateway to the City, 
we know you share our goal of creating a positive shopping environment representative of 
San Francisco. We believe that this amendment will do so. 



£0"d T9f0SS2STfrT6 , n 1USU ? A30 STK-blrS WOHd 6T:<LI B66T-4Z-130 



Alan Gibson, Budget Analyst 
October 27, 1999* 
Page 4 



Per your request, attached is DBE Subleasing Plan. Should you have any additional 
questions, please call me at (650) 794-4500. 



.ly vours 





Lorn A. Vasquez 

Assistant Deputy .Airport Director 

Concession Development and Management 



Cc: BobRhoades 
Attachment 

JT:ep/sm 



f0"d t9t702SSSTt?T6 ]_9 1W3W S A3Q STlH-WIdS UQiid 6t:<LX 666I-.2Z-.LDO 



30 "d IblOl 



Page 5 of b 



Alan Gibson, Budget Analyst 
October 27, 1999 
Page 5 



POST-SECURITY MASTER RETAIL/DUTY FREE CONCESSION LEASE 
DBE SUBLEASING PLAN 



DBE Subtenant 



Ethnicity 



Retail Concept 



Square 
Footage 



RDG Concessions 



CaJStar Retail, Inc. 



Tan Enterprises, Inc 



African Am. 



White 



Asian 



Sunglasses 
Watches 

Travel Accessories 
Subtotal 

California Gourmet 
Packaged Food 
and Candy 

Subtotal 

Tee Shirts 
Tee Shirts 
Team Sports 

Subtotal 



500 

1,856 

9S5 



3,251 



1.464 
1,024 



2,498 

300 
354 

1.027 



1,681 



Donnetta Stafford 


African Am. 


Travel Accessories 


S70 






Leather Goods 


2,053 






Apothecary 


1,684 


Subtotal 


4,707 


Pacific Gateway 


Hispanic 


Newsstand 


473 


Concessions, LLC 




Newsstand 


375 






News & Gift 


906 






News & Gift 


982 






News & Gift 


892 






Packaged Food & 


1,222 






Candv 




Subtotal 


4.850 






DBE Sublease Total 


17,087 






Master Concession Total 


57,253 






DBE Total 


30% 



S0'd 



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20 



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Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 



Item 4 - File 99-2006 
Department: 

Item: 

Location: 
Term of Lease: 



Annual Rental 
Rate Payable 
to the City: 

Description: 



Comments: 



Department of Real Estate (DRE) 

Mayor's Office of Community Development (MOCD) 

Resolution authorizing the Department of Real Estate to 
grant a six-month option to the San Francisco 
Neighborhood Resource Center, a nonprofit agency, for 
that agency to lease a vacant City-owned property. 

2350 19 th Avenue 

One year, and an unlimited number of one-year 
extensions, which must be exercised by both the San 
Francisco Neighborhood Resource Center as the lessee 
and the City as lessor. 



$1.00 

The proposed resolution would authorize the Department 
of Real Estate (DRE) to grant a six-month option to the 
San Francisco Neighborhood Resource Center, a nonprofit 
agency, to lease, for an annual rent of $1.00, a vacant 
City-owned building and parking lot, consisting of 12,500 
square feet, at 2350 19 th Avenue. The San Francisco 
Neighborhood Resource Center proposes to use the subject 
property to provide information and referral services to 
residents of the Sunset District, with a particular 
emphasis on providing services to the Chinese 
community. 

1. According to Mr. Gene Coleman of the Mayor's Office of 
Community Development (MOCD), several City 
departments, including MOCD, the Department of 
Children, Youth and their Families, and the Commission 
on the Aging, have identified an acute need for additional 
sites in the Sunset District to provide information and 
referral services to immigrant and non-English speaking 
residents of the Sunset District. Mr. Coleman states that 
MOCD awarded a $30,000 planning grant to the San 
Francisco Neighborhood Resource Center to design and 
coordinate appropriate information and referral services 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

21 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 



for the target population in the Sunset District. However, 
Mr. Coleman reports that the San Francisco 
Neighborhood Resource Center has not been able to locate 
suitable sites for the delivery of such information and 
referral services in the Sunset District. Therefore, 
according to Mr. Coleman and Mr. Harry Quinn of DRE, 
MOCD and DRE have recommended that the vacant 
property at 2350 19 th Avenue, be leased to the San 
Francisco Neighborhood Resource Center for the delivery 
of information and referral services to the target 
population. According to Mr. Quinn, the Fire Department 
previously used the subject property for the Fire 
Department's Stress Unit and for a limited amount of 
storage. According to Deputy Chief Patrick White of the 
Fire Department, the Stress Unit, formerly located in the 
property at 2350 19 th Avenue, is now located at the Ferry- 
Property, Room 280. 

2. Mr. Quinn states that the proposed resolution would 
authorize DRE to grant a six-month option to the San 
Francisco Neighborhood Resource Center to enable the 
Center to lease the subject City-owned property. Mr. 
Coleman of MOCD advises that the purpose of the six- 
month option to lease the subject property is to permit the 
San Francisco Neighborhood Resource Center to (a) apply 
for the required conditional use permit and obtain Master 
Plan approval from the Planning Department, (b) 
complete the environmental review process, if required, 
(c) make any necessary improvements to the subject 
property to meet disability access requirements at no cost 
to the City, and (e) obtain 501(c)(3) nonprofit tax status 
from the Internal Revenue Service. Mr. Coleman states 
that none of the conditions noted above have yet been 
met. 

3. According to Mr. Quinn, the subject 12,500 square foot 
property has a fair market lease value of approximately 
S58.800 per year. Mr. Quinn states that a nominal rental 
rate of SI. 00 per year would be charged to the San 
Francisco Neighborhood Resource Center because the 
Center would serve a public purpose. 

4. According to Mr. Quinn, if the option to lease were 
exercised, the future lease agreement between the City 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

22 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

and San Francisco Neighborhood Resource Center would 
require Board of Supervisors approval. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

23 



Memo to the Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

Item 5 - File 99-2018 



Department: 
Item: 

Amount: 
Source of Funds: 



Grant Period: 



Description: 



Public Transportation Commission 
Municipal Railway (MUNI) 
Port 

Resolution authorizing the Public Transportation 
Commission to accept and expend $113,439,665 of 
grant funds for 14 Municipal Railway capital 
projects and one Port capital project. 

$113,439,665 

Federal Transit Administration (FT A) 

disbursement of Federal formula-apportioned 
capital assistance funds comprising (a) $72,299,553 
from the Federal Congestion Mitigation and Air 
Quality Program (CMAQ) and the Surface 
Transportation Program (STP), and (b) $41,140,112 
from FTA Section 5307 capital assistance funds. 

According to Ms. Gail Bloom of the Public 
Transportation Commission, there is no date by 
which the subject grant monies must be expended. 

The proposed resolution would authorize the Public 
Transportation Commission to accept and expend 
$113,439,665 of Federal capital assistance funding 
which would contribute part of the total funding 
required for the 15 capital projects listed in the 
Table below. A more detailed summary of the 
subject grant's funding sources and the planned 
expenditures totaling $113,434,665 is contained in 
Attachment I provided by Ms. Bloom. The total 
project budgets of $1,137,112,800 for the 15 
projects to which the subject grant contributes the 
$113,439,665 are contained in Attachment II 
provided by Ms. Bloom. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

24 



Memo to the Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 



MUNI projects which would receive funding from 


Federal errant 
contribution 


the subject errant 


1. Accessible Van/Debt Card 


$1,630,000 


2. Cable Car Infrastructure 


500,000 


3. Cable Car Vehicle Rehabilitation 


822,815 


4. Diesel Bus Purchase 


10,000,000 


5. Historic Vehicle Program 


2,500,000 


6. Islais Creek Maintenance Facilitv 


3,958,000 


7. Light Rail Vehicle Purchase 


25,000,000 


8. MUNI Metro Accessibility Improvements 


1,347,297 


9. MUNI Metro Subway Improvements 


1,175,000 


10. Rail Replacement 


20,954,000 


11. Bus-stop Boarding Improvements 


558,000 


12. Trolley Coach Purchase 


34.490,000 


13. Trollev Overhead Reconstruction 


1,840,000 


14. Woods Maintenance Facility 

MUNI Subtotal: 


6.664.553 


$111,439,665 


Port project which would receive funding from the 




subject grant 


15. Downtown Ferry Terminal Improvements 
TOTAL: 


S2.000.000 


$113,439,665 



Required Match: The subject Federal grant requires the City to 

provide matching funds in the total amount of 
S 19,679,885. Ms. Bloom states that the required 
match funding of $19,679,885 will be obtained by 
the Public Transportation Commission from a 
variety of regional, state, and local funding sources 
including the State Highway Account, the State 
Public Transportation Account. State Proposition 
116 Bond funds, regional bridge toll net revenues, 
the San Francisco Municipal Railway Improvement 
Corporation, cable car settlement funds, and/or San 
Francisco County Transportation Sales Taxes. The 
total amount of $19,679,885 includes (a) $9,394,857 
to match the Federal CMAQ and STP grants, and 
(b) $10,285,028 to match the FTA Section 5307 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to the Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

capital assistance grant. As shown in Attachment 
I, the total proposed Federal grant of $113,439,665 
and the required matching funds of $19,679,885 
totals $133,119,550 of project costs. 

Attachment III, provided by Ms. Bloom, breaks 
down the required match funding of $19,679,885 by 
project and indicates that $18,453,058, or 93.8 
percent, has already been awarded by the Public 
Transportation Commission. The remaining 
balance of $1,226,827, which has not yet been 
awarded, is planned to be awarded in the near 
future, according to Ms. Bloom. 



Indirect Costs: 



Budget: 



Ms. Bloom states that the FTA's indirect cost 
allocation plan allows for the recovery of 
$3,944,325, or approximately 3.5 percent, of the 
subject grant for administrative overhead costs. 

As shown in Attachment II, the subject grant of 
$113,439,665 contributes approximately 10 percent 
of the funding required by the 15 capital projects 
which have a total estimated budget of 
$1,137,112,800. The balance of needed funds of 
$1,023,673,135 is being funded from a combination 
of Federal, state, regional, and local funding 
sources. 



Comments: 



1. According to Ms. Bloom, the 15 subject capital 
projects have been given priority for Federal capital 
assistance funding by the Metropolitan 
Transportation Commission, in its role as the 
regional transportation planning agency. 

2. Of the subject grant's total amount of 
$113,439,665, Ms. Bloom states that $103,928,965, 
or 91.6 percent, will be expended on construction 
and consulting contracts. Ms. Bloom reports that 
the construction contracts will be put out to bid and 
the consulting contracts will undergo a combined 
Request for Qualifications/Proposals process. Ms. 
Bloom also states that $5,566,375, or 4.9 percent, of 
the subject grant will be expended on in-house 
labor for design, project management, and 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to the Finance and Labor Committee 

November 10, 1999 Meeting of the Finance and Labor Committee 

rehabilitation work. As noted above, $3,944,325, or 
the remaining 3.5 percent, of the subject grant will 
permit the recovery of administrative overhead 
costs. 

3. Attachment rv is a Grant Application 
Information Form prepared by the Public 
Transportation Commission. 

4. The Public Transportation Commission has 
prepared a Disability Access Checklist, a copy of 
which is on file with the Clerk of the Board of 
Supervisors. 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



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TOTAL P. 02 



29 



FILE NAME; PTC COMMISSION REQUEST 

Prepared by Gail Bloom 

Source: GRANT AWARD AND FINANCIAL PLAN 



PROJECT NAME 

Trolley Buses 

Trolley Buses 

LRVs 

Historic Stcars 

Diesel Buses 

Cable Car Rehabilitation 

Cable Car Infrastructure 

Subway Station Enhancements 

Subway Station Enhancements 

Rail Replacement 

Rail Replacement 

Rail Replacement 

Rail Replacement 

Trolley Overhead Reconstruction 

Busstop Boarding Improvements 

WOODS 

Islais Creek 

Islais Creek 

Ferry Terminal 

Ferry Terminal 

Accessible Vans 

MUNI Metro Accessibility 

SUBTOTAL 



PENDING 


PENDING 


ANNUAL 


not 




CA-90-X893 


CA-90-X893 


ELEMENT 


awarded 


awarded 


FTA 5307 


STP/CMAQ 


COST 






S15.000.000 


so 


$18,750,000 




$3,750,000 


so 


$19,490,000 


$22,022,599 




$2,532,599 


SO 


$25,000,000 


$28,248,588 




53.248.588 


52,500,000 


so 


S3.125.000 




$625,000 


$10,000,000 


SO 


$12,500,000 




$2,500,000 


$822,815 


SO 


$1,028,519 


538,000 


$167,750 


$500,000 


$0 


$625,000 




5125,000 


SO 


5675,000 


$762,712 


$87,712 


SO 


so 


$500,000 


S564.972 




$64,972 


$7,500,000 


$0 


59,375,000 




$1,875,000 


SO 


53.190.000 


$3,604,520 




$414,520 


so 


$3,696,000 


54,176.271 




$480,271 


SO 


$6,568,000 


57.421.469 




$853,469 


51.840,000 


$0 


52.300.000 


5363,112 


$96,888 


SO 


5558,000 


$630,508 


572.508 


$0 


so 


$6,664,553 


$7,530,568 


$0 


$866,015 


$0 


$2,580,000 


$2,915,254 


$0 


$335,254 


so 


51,378,000 


$1,557,062 


$0 


S89.433 


$0 


$1,000,000 


51.129,944 


SO 


$129,944 


$0 


$1,000,000 


$1,129,944 


$0 


$129,944 


$1,630,000 


$0 


$2,037,500 


$407,500 


$0 


$1,347,297 


$0 


$1,684,121 


$0 


$168,412 


$41,140,112 


$72,299,553 


$133,119,550 


$1,226,827 


$18,453,058 



TOTAL SECTION 5307 
TOTAL STP/CMAQ 
TOTAL SECTION 9 MATCH 
TOTAL STP/CMAQ MATCH 



$41,140,112 

572,299.553 

$10,285,028 

S9.394.857 



$133,119,550 



30 



GRANT APPLICATION INFORMATION FORM Attachment I\ 

A document required to accompany a proposed resolution 
Authorizing a Department to Apply for a Grant 

To: The Board of Supervisors 
Attn: Clerk of the Board 

The following describes the grant referred to in the accompanying resolution: 

Department: 35 Public Transportation Commission - MUNI 

Contact Person: Gail Bloom Telephone: (415) 923-2573 

Project Title: Grant Application for One Port and Fourteen MUNI CIP projects 

Grant Source: Federal Transit Administration Section 5307. STP. CMAO 

Proposed (Continuation) Grant Project Summary: 

Accessible Van/Debit Card 

Cable Car Infrastructure 

Cable Car Vehicle Rehabilitation 

Diesel Bus Purchase 

Downtown Ferry Terminal Improvements 

Historic Vehicle Program 

Islais Creek Maintenance Facility 

Light Rail Vehicle Purchase 

Muni Metro Accessibility Improvements 

Muni Metro Subway Improvements 

Rail Replacement 

Transit Preferential Streets/ Accessible Stop &. Bulbs 

Trolley Coach Purchase 

Trolley Overhead Reconstruction 

Woods Division 

Amount of Federal Grant Funding Applied for: $113.449.665 

Amount of Required State, Local and Regional Matching Funds: Sl9. 679.885 

Maximum Funding Amount Available: Not Applicable __ 

Number of Positions Created and Funded: Not Applicable 

Amount to be Spent on Contractual Services: S103.928.965 

Will Contractual Services be put out to Bid? Yes _^___ 

Term of Grant: Not Applicable 

Date Department Notified of Available funds: Not Applicable 

Application Due Date: Not Applicable 



/%/*/ J. ^/ Mma^^ 



Department Head Approval 
MCap/Grants/Fed/Sec9/BOS Form CA-90-X893 

31 



Memo to Finance and Labor Committee 

November 10, 1999 Finance and Labor Committee Meeting 

Item 6 -File 99-1646 



Item: 



Resolution imposing Interim Zoning Controls for a period 
of eight months to (a) add live/work units to the definition 
of residential use in Article 8, Section 890.88 of the 
Planning Code; (b) to delete the exemption from height 
limits for live/work units set forth in Planning Code 
Section 260(b)(2)(0); (c) to delete live/work units from the 
list of other uses set forth in Planning Code Section 227(p) 
and 227(q); and (d) include live/work units in the list of 
dwellings set forth in Planning Code Section 215. 



The Chair of the Finance and Labor Committee intends to 
entertain a motion to continue this item to the call of the 
Chair. 



Recommendation: 



Continue the proposed resolution to the call of the Chair. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

32 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

Item 7 - File 99-0652 

1. This is a hearing to consider the cost of transferring paramedic services from 
the Health Department to the Fire Department. 

2. During Fiscal Year 1997-98, the Fire Department assumed management 
control and direct operation of the City's Emergency Medical Services program 
(EMS) formerly provided by the Department of Public Health (DPH). The EMS 
program operates a fleet of ambulances, related rescue equipment and responds to 
medical emergencies throughout the City. In April of 1997, the Fire Department 
received approval of a supplemental appropriation in the amount of $1,653,393 for 
the one-time transition costs related to transferring EMS from the DPH to the Fire 
Department. 

3. The Fire Department's first full Fiscal Year of operating the EMS was FY 
1998-99. After the Department's budget was approved, due to a decision to increase 
the number of EMS ambulances deployed on a daily basis from 17 to 21, the Fire 
Department needed additional funding and therefore requested a supplemental 
appropriation, that was eventually approved by the Board of Supervisors in the 
amount of $1,685,145 to increase Fire Department staffing by a total of 36 
Firefighter positions, in order to permanently increase the number of EMS 
ambulances operated on a daily basis by four from 17 to 21. The annual cost of the 
36 new Firefighter positions is $2,471,851 in salaries and fringe benefits at FY 
1999-2000 salary levels. 

4. The last full year of DPH's operation of EMS was FY 1996-97. In order to 
compare the costs of DPH's EMS program with the current FY 1999-2000 costs of 
the Fire Department's EMS program, the Budget Analyst has reviewed both 
historical and current budgetary data. We found that comparisons of personnel and 
personnel-related costs appear relevant, but that insufficient historical budgetary 
data exists to compare non-personnel operating costs. The remainder of this report 
therefore provides a comparison of EMS personnel and personnel-related costs such 
as premium pay, overtime and fringe benefits, under DPH and the Fire 
Department. It is assumed however, that non-salary related operating costs, such 
as materials and supplies and vehicle maintenance, have increased under the Fire 
Department's operation of EMS commensurate with the increased number of 
Firefighter Paramedic personnel described in this report. 

4. Attachment 1 provides a detailed schedule of DPH's Emergency Medical 
Services personnel costs, using FY 1999-2000 salary and fringe benefit rates. 
Attachment 1 shows that if the EMS program were still under DPH, baseline 
personnel costs, using the number of positions funded in FY 1996-97, would total 
$15,254,678 in FY 1999-2000. Attachment 1 also shows that, if DPH had added 36 

Board of Supervisors 
Budget Analyst 

33 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

new paramedic positions to staff four additional ambulances daily, personnel costs 
would have increased to $17,890,214. 

Attachment 2 provides the same information for FY 1999-2000 personnel 
costs for the Fire Department's EMS program. Attachment 2 shows that the Fire 
Department's total baseline salary and fringe benefit costs, not including 36 
additional firefighter personnel added by supplemental appropriation in FY 1998- 
99, are $16,274,801!, or $1,020,123 more than the FY 1999-2000 personnel cost of 
$15,254,678 baseline services for EMS services previously provided by the DPH. 

The primary reason for the Fire Department's increased personnel cost of 
$1,020,123 is increased total staffing in the Firefighter-Paramedic and Supervisory 
classifications. As shown below, the Fire Department's Baseline EMS services (prior 
to the addition of 36 Firefighters for the operation of four ambulances daily) 
included a total of 185.5 FTE or 7.5 FTEs more than the DPH EMS program which 
included a total of 178 Paramedic and Supervisory positions. Also, Supervisory 
positions increased from by 18 FTE from 17 FTE under DPH to 35 FTE under the 
Fire Department, while Paramedic personnel decreased by 10.5 FTE, resulting in 
the net increase of 7.5 FTEs. 

Paramedic and Supervisory Paramedic Personnel Comparison 



DPH Paramedic and Supervisory 
Personnel 



Fire Department Paramedic and 
Supervisory Personnel 







Position 




Position 


Class 


Class Title 


Count Class 


Class Title 


Count 


2535 


Chief, Paramedic Division 


1.0 


H53 


Chief, Emergency Medical 
Service 


1.00 


2531 


Deputy Chief, Paramedic 
Division 


1.0 


H43 


Section Chief, Emergency 
Medical 


5.00 


2529 


Assistant Chief, Paramedic 
Division 


1.0 


H2S 


Captain, Emergency 
Medical Servi 


28.00 


2530 


Senior Medical Steward 


1.0 


H20 


Lieutenant. (Fire 
Department) 


1.00 


2534 


Paramedic Supervisor 


13.0 


2532 


Paramedic 


9.00 


2532 


Paramedic 

Total Paramedic and 


161.0 


H 1 


Fire Rescue Paramedic 
Attrition Savings - Uniform 

Total Fire Department 


147.50 
(6.0) 




Supervisory FTE 


178.0 




Paramedic and 
Supervisory FTE 


185.5 



1 This total includes a projected 5.5 percent salary increase for Hi Firefighter-Paramedics, the same 
salary increase granted to all other Uniform Fire Department personnel in July, 1999. An MOU for 
the HI Firefighter-Paramedics has not yet been submitted to the Board of Supervisors for approval. 

Board of Supervisors 
Budget Analyst 

34 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

The Fire Department has previously communicated to the Finance and Labor 
Committee, in March of 1999, that the increased staffing for supervisory positions 
was part of the transition plan as a means of correcting understaffing of Paramedic 
Supervisors under the Department of Public Health. According to the Fire 
Department, Paramedic Captains are available, and do provide Paramedic services 
whenever required. Other factors such as the 24-hour shift for Paramedics and less 
down time during shift changes, according to the Fire Department, result in an 
increased availability of personnel at all times. 

5. As previously noted, in April of 1999 the Fire Department received approval 
of a supplemental appropriation for the addition of 36 Firefighter positions in order 
to staff and operate four additional ambulances on a daily basis. Based on FY 1999- 
2000 salary and benefit rates, the cost of these 36 new positions is $2,471,851 
annually, over and above the baseline Fire Department EMS personnel costs of 
$16,274,801 noted above, resulting in total FY 1999-2000 personnel costs of 
$18,746,652. Hence, with the new Firefighter personnel for the four additional 
ambulances, personnel costs for the Fire Department's EMS program now total 
$18,746,652, or $3,491,974 more than the $15,254,678 amount representing DPH's 
cost for the baseline EMS program at FY 1999-2000 salary levels. 

With the addition of four ambulances daily, the Fire Department is now 
clearly operating at a higher level of service than was previously provided under 
DPH. If the DPH had received funding for an additional 36 Paramedic positions, the 
additional cost to DPH, at FY 1999-2000 salary and fringe benefit levels, would be 
$2,635,536 and their total EMS personnel costs would be $17,890,214 ($15,254,678 
for baseline services plus $2,635,536 for 36 Paramedic positions). 

Therefore, the cost difference between the Fire Department and the projected 
DPH cost for personnel expenditures related to the enhanced EMS program, which 
added four ambulances daily, is $856,438 annually ($18,746,652 compared to 
$17,890,214). 



Board of Supervisors 
Budget Analyst 
35 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

Summary 

The one-time cost of transitioning the Emergency Medical Services program 
from the Department of Public Health to the Fire Department was $1,653,39. For 
annual operating costs, this analysis concludes that the personnel co&os for the Fire 
Department's baseline EMS program exceeds the cost of the program that would be 
provided under the DPH's EMS staffing configuration by $1,020,123 annually 
($16,274,801 less $15,254,678). This increased cost is due largely to increased 
supervisory staffing, whereby the number of supervisory EMS positions increased 
by 18 FTEs from 17 FTEs under DPH to 35 FTEs under the Fire Department. 

The Fire Department's EMS program was expanded in April of 1999 to 
provide staffing for four more ambulances daily (21 ambulances instead of 17 
ambulances daily) at an additional cost of $2,471,851 annually, for total personnel 
expenditures of $3,491,974 annually more than the DPH EMS baseline program 
($18,746,652 less $15,254,678). 

If DPH had similarly increased Paramedic staffing, Fire Department 
personnel expenditures for the enhanced service would exceed DPH personnel 
expenditures by $856,438 annually ($18,746,652 less $17,890,214). 



Board of Supervisors 
Budget Analyst 
36 



DPH Paramedic Personnel Detail Projection 
Using 1999-00 Salarv Rates 



Attachment 1 



Job Class Class Title 

1426 Senior Clerk Typist 

1450 Executive Secretary I 

1819 Management Info Systems Specia 

1932 Asistant Storekeeper 

2110 Medical Records Clerk 

2112 Medical Records Technician 

2529 Assistant Chief, Paramedic Division 

2530 Senior Medical Steward 

2531 Deputy Chief, Paramedic Division 

2532 Paramedic 

2534 Paramedic Supervisor 

2535 Chief, Paramedic Division 
2736 Porter 

Salary Savings - Miscellaneous 
Premium Pay - Miscellaneous 
Overtim - Miscellaneous 
Holiday Pay - Miscellaneous 
Step Adjustments 

Total Baseline Salaries 
Mandatory Fringe Benefits 



1999-00 


Position 




Salaries 


Count 


Salaries 


; 41,516 


4.00 S 


166,065 


49,783 


1.00 


49,783 


67,338 


1.00 


67,338 


36,368 


8.00 


290,941 


42,918 


1.00 


42,918 


48,106 


1.00 


48,106 


74,792 


1.00 


74,792 


68,674 


1.00 


68,674 


79,901 


1.00 


79,901 


63,827 


161.00 


10,276,115 


75,696 


13.00 


984,048 


88,089 


1.00 


88,089 


38,071 


1.00 


38,071 




(0.41) 


(25,809) 




- 


114,646 




- 


208,041 
182,281 






H73 7SX1 




194.59 S 


12,380,741 
2.87" 9"7 



Total Baseline Salaries and Fringe Benefits 



S 15,254,678 



Cost of Increased Staffing if DPH were to add 36 Paramedic Positions for Additional Ambulances 



2532 Paramedic 63,827 

Step Adjustments 
Total Additional Salaries 
Mandatory Fringe Benefits 
Total Additional Salaries and Fringe Benefits 

Grand Total Salaries and Fringe Benefits 



36.00 



s 


2,297,765 
f172TW 


2,125,432" 

sin 104 


s 
s 


2,635,536 
17.890.214 



37 



FY 1999-2000 Fire EMS Position Detail 



Attachment 2 







1999-2000 


Position 




Job Class 


Class Title 


Salaries 


Count 


Salaries 


STEPM 


Step Adjustments, Miscellaneous 




0.00 S 


(9,975) 


1023 


Administrator III 


S 63,362 


1.00 


63,362 


1220 


Payroll Clerk 


46,481 


1.00 


46,481 


1424 


Clerk Typist 


37,900 


1.00 


37,900 


1426 


Senior Clerk Typist 


41,516 


3.00 


124,549 


1450 


Executive Secretary I 


49,783 


1.00 


49,783 


1932 


Assistant Storekeeper 


36,368 


8.00 


290,941 


2110 


Medical Records Clerk 


42,918 


1.00 


42,918 


2112 


Medical Records Technician 


48,106 


1.00 


48,106 


2230 


Physician Specialist 


105,534 


0.55 


58,043 


2532 


Paramedic 


63,827 


9.00 


574,441 


9993M 


Attrition Savings - Miscellaneous 


- 


(0.52) 


(19,992) 


H 1 


Fire Rescue Paramedic 


62.566 


147.50 


9,228,426 


H20 


Lieutenant, (Fire Department) 


69,430 


1.00 


69,430 


H28 


Captain, Emergency Medical Servi 


79,307 


28.00 


2.220,607 


H43 


Section Chief, Emergency Medical 


95,185 


5.00 


475,923 


H53 


Chief, Emergency Medical Service 


104,328 


1.00 


104,328 




Step Adjustments - Uniform 




- 


(187,575) 




Attrition Savings - Uniform 




(6.01) 


(398,429) 




Premium Pay - Miscellaneous 




- 


6,771 




Premium Pay - Uniform 




- 


97,802 




Overtime - Miscellaneous 




- 


19,185 




Overtime - Uniform 




- 


277,136 




Holiday Pay - Miscellaneous 




- 


19,959 




Holiday Pay - Uniform 
Total Baseline Salaries 




- 


293.923 




202.5: s 


13,534.045 




Mandatory Fringe Benefits 






2 1°< ns 




Subtotal Baseline Salaries and Fringe 


Benefits 


s 


15,729.170 



Additional Salary and Fringe Benefit 
Costs Assuming a 5.5% increase for HI 
Firefighter Paramedics 



5-15.6? 1 



Total Baseline Salaries and Fringe Benefits 



S 16. 274 ,801 



Additional 36 Firefighters Four Ambulances Addedin FT 1998-99 

H2 Firefighter 59.S15 36.00 S 2.153.326 

Step Adjustment (???S-ri 

Total Additional Salaries 2,1 19.941 

Mandatory Fringe Benefits 351.Q1Q 

Total Additional Salaries and Fringe Benefits S 2,471,851 



Grand Total Salaries and Fringe Benefits 



S 18,746.652 



38 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

Item 8 -File 99-1941 

1. This is a hearing to consider Fire Department Overtime expenditures. 

2. During Fiscal Year 1997-98, the Fire Department's original budget for 
overtime was $2,446,649. However, during the first 6.9 pay periods, out of a total 
26.1 pay periods in Fiscal Year 1997-98, the Fire Department expended $2,472,149 
for overtime, or $25,500 more than the Department's approved annual overtime 
budget, resulting in a projected deficit for overtime of $2,000,000. As a result, a 
supplemental appropriation for $2,000,000 was requested by the Fire Department 
and approved by the Board of Supervisors. The table below shows the original 
budget, revised budget and actual expenditures for all Salary and Fringe Benefit 
expenditure objects, including Overtime, during Fiscal Year 1997-98. 

As shown in the table below, the Fire Department ended FY 1997-98 with a 
deficit of $485,546 in all Salary and Fringe Benefit expenditure objects even after 
the approval of the $2,000,000 Supplemental Appropriation for overtime. According 
to Ms. Debra Ward, Chief Financial Officer of the Fire Department, the deficit in 
Salary and Fringe Benefit expenditure objects was offset by budgetary savings in 
other, non-personnel related expenditure objects within the Fire Department's 
budget, primarily savings in services of other departments, facilities maintenance 
and materials and supplies. 









1997-1998 






Original 


Revised 


Actual 


Surplus 


Expenditure 




Budget 


Budget 


Expenditures 


(Deficit) 


Permanent Salaries - 


Misc. 


S 13,989,124 


S 14,495,547 


S 10,871,328 


S 3,624,219 


Permanent Salaries - 












Uniform 




82,811,289 


83,466,289 


84,810,181 


(1,343,892) 


Temporary Salaries 




37,224 


123,224 


250,860 


(127,636) 


Premium Pay 




2,107,854 


2,107,854 


2,944,097 


(836,243) 


Overtime Pay 




2,446,649 


4,271,649 


6,417,577 . 


(2,145,928) 


Holiday Pay 




5,290,587 


5,290,587 


5,155,947 - 


134,640 


Mandatory Fringe Benefits 


16.530.489 


16.679.447 


16.470.153 


209.294 


Total 




S123,213,216 


S126,434,597 


5126,920,143 


S (485,546) 



3. In Fiscal Year 1998-99, the Fire Department again faced a deficit due to 

overtime spending and requested a supplemental appropriation of $2,127,526, that 
was subsequently reduced by $442,095 by the Finance and Labor Committee, and 
approved by the Board of Supervisors in the amount of $1,685,145. The Fire 
Department incurred the expenditure deficit during FY 1998-99 because of a 
decision by the Department to increase the number of Emergency Medical Service 
(EMS) ambulances deployed on a daily basis from 17 to 21. 

Board of Supervisors 

Budget Analyst 

39 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 



Despite the Board of Supervisors approval of the Fire Department's 
supplemental appropriation in the amount of $1,685,145 in FY 1998-99, the Fire 
Department ended FY 1998-99 with a deficit of $2,136,778 in all Salary and Fringe 
Benefit expenditure objects as shown in the table below. According to Ms. Ward, the 
deficit in Salary and Fringe Benefit expenditure objects was offset by budgetary 
savings in other, non-personnel related expenditure objects within the Fire 
Department's budget, including savings in the Consent Decree project appropriation 
due to the end of the consent decree, and facilities maintenance. 







1998-1999 






Original 


Revised 




Surplus 


Expenditure 


Budget 


Budget 


Actual 


(Deficit) 


Permanent Salaries - Misc. 


S3,510,796 


S 4,510,796 


S 5,42S,206 


S (917,410) 


Permanent Salaries - 










Uniform 


98,405,541 


93,748.442 


93,776,583 


(28,141) 


Temporary Salaries 


37,224 


37,224 


393,639 


(356,415) 


Premium Pay 


2,107,854 


2,107,854 


3,369,157 


(1,261,303) 


Overtime Pay 


3,095,629 


8,431.691 


8,443,173 


(11,482) 


Holiday Pay 


5,290,587 


5,290,587 


5,441,507 


(150,920) 


Mandatory Fringe Benefits 


17.193.731 


17.296.374 


16.707.481 


588.893 


Total 


S 129,641,362 


S 131,422,968 


S 133,559,746 


S (2,136,778) 



4. The table on the following page provides a projected year end balance for FY' 
1999-2000 Fire Department General Fund Salary- and Fringe Benefit expenditure 
objects, based on a comparison of the Department's original budget and actual 
expenditure data through the pay period ending October 15, 1999 provided by the 
Controller. Overall, the Fire Department is expending Salaries and Fringe Benefits, 
including Overtime, at a rate that would result in a yearend surplus of $723,213. 
However, the table also shows a projected deficit for Overtime of $4,958,093, as well 
as deficits in other expenditure objects, which are being offset by savings in Holiday 
Pay and Uniform Salaries objects of expenditures. 



Board of Supervisors 
Budget Analyst 
40 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 



Controller's Projected 1999-2000 Salary 

and Fringe Benefit Expenditures 

including Overtime 

Using Data from Pav Period Ending 10/15/99 









Projected 




Revised 


Projected 


Surplus 


Expenditure 


Budget * 


Actual 


(Deficit) 


Permanent Salaries - Misc 


S5,010,440 


S5,308,192 


(S297,752) 


Permanent Salaries - Uniform 


106,115,250 


98,395,850 


7,719,400 


Temporary Salaries 


119,724 


511,073 


(391,349) 


Premium Pay 


8,407,795 


9,554,795 


(1,147,000) 


Overtime Pay 


3,586,076 


8,544,169 


(4,958,093) 


Holiday Pay 


1,194,493 


797,499 


396,994 


Mandatory Fringe Benefits 


17.906.298 


18.505.285 


(598.987 , l 



Total 



5142,340,076 5141,616,863 5723,213 



* The Fixe Department's Revised Budget for FY 1999-2000 reflects net additional Premium and 
Holiday Pay amounts of $1,942,975 due to budgetary revisions adding funds from the City's 
Salaries and Benefits Reserve following approval of a new Firefighter MOU in July, 1999. 

5. The Fire Department has prepared a spending plan for FY 1999-2000 that 
incorporates changes in the rate of spending for salaries and fringe benefits as new 
Firefighter personnel are hired, thus diminishing the need for overtime 
expenditures in the second half of the Fiscal Year to backfill for vacancies in Fire 
Suppression units. The table below provides a comparison between the FY 1999- 
2000 Fire Department budget for Salaries and Fringe Benefits and the department 
spending plan. 



Fire Department Projected 1999-2000 

Salary and Fringe Benefit Expenditures 

including Overtime 

Using Department Spending Plan 









Projected 




Revised 


Spending 


Surplus 


Expenditure 


Budget * 


Plan 


(Deficit) 


Permanent Salaries - Misc 


55,010,440 


55.596,424 


S (585,984) 


Permanent Salaries - Uniform 


106,115,250 


102,474,386 


3,640,864 


Temporary Salaries 


119,724 


192,366 


(72,642) 


Premium Pay 


8,407,795 


9,671,152 


(1,263,357) 


Overtime Pay 


3,586,076 


4,428,059 


(841,983) 


Holiday Pay 


1,194,493 


620,827 


573,666 


Mandatory Fringe Benefits 


17.906.298 


18.095.627 


(189.3291 


Total 


5142,340,076 


5141,078,841 


51,261,235 


Board of 


■ Supervisors 






Budget Analyst 




- 




41 







Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 



Using the Department's spending plan, the Fire Department is expending Salaries 
and Fringe Benefits, including Overtime, at a rate that would result in a yearend 
surplus of $1,261,235. The table also shows a projected deficit for Overtime of only 
$841,983 instead of the Controller's overtime projected deficit of $4,958,093, using 
year to date expenditure data. 

6. The attached memorandum from Ms. Ward, provides an explanation of the 
Fire Department's FY 1999-2000 year to date spending and the year end projections 
using the Department's spending plan. 

7. In summary, subsequent to obtaining approval from the Board of Supervisors 
for the FY 1997-98 and FY 1998-99 annual budgets, the Fire Department needed a 
supplemental appropriation of $2,000,000 for Overtime in FY 1997-98 and a 
supplemental appropriation of $1,685,145 for Uniform Salaries and Overtime in FY 
1998-99. In addition, for this current Fiscal Year of 1999-2000 the Controller's 
projections, based on year to date expenditure data, projects another deficit of 
$4,958,093 in the Fire Department's Overtime account, which is offset by surpluses 
in Holiday Pay and Uniform Salaries, for a projected surplus in General Fund 
salaries and benefits including overtime, of $723,213. 

As previously noted, the Fire Department's latest spending plan predicts that 
the deficit of in the Fire Department's Overtime account will only amount to 
$841,983 and that the Department will finish FY 1999-2000 with a surplus in 
General Fund salaries and benefits of $1,261,235. 

The Budget Analyst notes that the Fire Department's spending plan for FY 
1999-2000 projects total General Fund Overtime expenditures of $4,428,059 or 
$S41,983 more than the budget amount of $3,5S6,076. However, as of the 
completion of the October 15, 1999 pay period (7.7 pay periods out of 26.2 pay 
periods in FY 1999-2000, or 29.4 percent of the Fiscal Year), the Fire Department 
has already expended $2,504,661 for Overtime or 69.8 percent of the Fire 
Department's General Fund Overtime budget of $3,586,076. Therefore, the Budget 
Analyst concludes that it is highly probable that the Fire Department will exceed its 
General Fund Overtime budget by a much larger sum than the Fire Department's 
spending plan projection of $841,983. 



Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

November 10, 1999 Finance Committee Meeting 

According to Ms. Ward however, Overtime expenditures have been 
decreasing in recent pay periods and the Department expects to meet its spending 
plan projections, which are based on their hiring plan for new Firefighters. The 
Budget Analyst remains unconvinced that the Fire Department will adhere to its 
latest Overtime spending plan of $4,428,059 for FY 1999-2000 which is $4,116,110 
($8,544,169 less $4,428,059) or over 48 percent less than the Controller's latest 
projection for Fire Department Overtime. 



cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakey 




Harvey M. Rose 



Board of Supervisors 

Budget Analyst 
43 



Attachment 
Page 1 of 2 



CITY AND COUNTY OF SAN FRANCISCO 

SAN FRANCISCO FIRE DEPARTMENT 

ROBERT [_ DEMMONS. Chief of Deportment f ^S3^^\ 898 SECOND STREET 

HAROLD E. GAMBLE, Deputy Chief of Operation* 9 f-^5(«^"«5 I SAN FRANCISCO. CA »4107-2O1 6 

PATRICK W.WHITE. Deputy Chief of Administration V *^S & <41S) SS8-14C0 



November 5, 1999 



Mr. Ken Bruce, Budget Analyst 

San Francisco Board of Supervisors 

1390 Market Street 

Suite 1025 

San Francisco, California 94 1 02 

Dear Mr. Bruce: 

This is in response to your memorandum regarding the reasons for the Controller's 
projected over-expenditures for Fiscal Year 1999-2000 for overtime. As we have 
explained in the past, July, August and September are traditionally high overtime usage 
months for the Fire Department. The projections that have been provided by the 
Controller's High Level Monthly Reports are based on expenditures year to date, which 
are straight lined. The Department has prepared a spending plan which is based on the 
annual overtime usage patterns, planned Fire Academy classes and projected retirements. 
With this information, we have projected a much lower rate for Overtime expenditures 
and a higher rate of expenditure for Permanent Uniform Salaries. 

Tne appropriation for the personnel budget is at the Character level. .As such, we 
anticipate that for all expenditures in personnel categories, there will be a surplus. Based 
on the current High Level Monthly Reports produced by the Controller's Office, the 
amount of the surplus should be approximately SI .3 million after adjustments for Holiday 
Pay projections and Premium Pay projections. 

The current reports also show a deficit in the projection for Premium Pay of 
approximately SI. 3 milli on and S84 1,983 in Overtime Pay. However, these deficits are 
offset by the projected $573,666 projected surplus in Hobday Pay as well as the projected 
surplus of S3. 6 million Permanent Salaries - Uniform. It should also be noted that the 
projected Holiday Pay expenditure, which totals S620.827 in the current reports, should 
only be approximately SI 30,000 after all of the adjustments are made. The Department is 
working with the Controller's Office to make sure that all of these adjustments are made 
and reflected in the monthly financial reports. As stated previously, with these 
adjustments the anticipated personnel budget surplus for Fiscal Year 1999-2000 is 
approximately SI. 3 million. 



44 



Attachment 
Page 2 of 2 



If there is additional information that you would like regarding the Fire Department's 
proposed spending plan, the budget adjustments related to the approval of the MOU with 
Local 798 or the changes in the Holiday Pay provisions, please feel free to contact us. 



Respectfully, 



Robert L. Demmons, 
Chief of Department 

By Debra Ward, 
Chief Financial Officer 



45 




City and County of $an Francisco 

Meeting Minutes 
finance and Labor Committee 

Members: Supervisors Leland Yee, Sue Merman and Tom Ammiano 
Clerk: Mary Red 



City Hall 

1 Dr. Carlton B 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, November 17, 1999 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Tom Ammiano. 
Members Absent: Sue Bierman. 



Meeting Convened 

The meeting convened at 10: 10 a.m. 

991811 [Ferry Building Lease and Negative Declaration] 

Resolution approving lease with Ferry Building Investors, LLC, for the rehabilitation of the Ferry Building 
(The Embarcadero and Market Street) as a mixed use project; approving Negative Declaration. (Port) 

(Final Negative Declaration adopted and issued October 1, 1998.) 

9/22/99, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 10/27 1999 

1 1/3/99, CONTINUED. Continued to November 17, 1999 

Heard in Committee. Speakers: Michael Levine. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Yee, Ammiano 
Absent: 1 - Bierman 



991619 [Establishment of Airport Special Event Account] 

Ordinance amending Administrative Code by adding Section 10.1 14-3 to establish an Airport Promotion and 
Event Account; allow for the acceptance of gifts by the Airport Commission; and. authorize the Airport 
Commission to expend monies in account. (Airport Commission) 

(Fiscal impact; Adds Section 10.1 14-3.) 

8/17/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

10/13/99, SUBSTITUTED Substituted by Airport Commission 10/13/99, bearing new title 

10/13/99, ASSIGNED to Finance and Labor Committee 

1 1/10/99, CONTINUED. Continued to November 17, 1999. 

Continued to December 1, 1999. DOCUMENTS DEPT. 

CONTINUED by the following vote: 

Ayes: 2 - Yee, Ammiano *inw « n 4O0Q 

Absent: 1 - Bierman INUV I 3 13-3 

SAN FRANCISCO 
PUBLIC LIBRARY 



City and County of San Francisco 



Printed at 6:01 PM on II l'V9 



Finance and Labor Committee 



Meeting Minutes 



\ member 17, 1999 



991923 (Expenditure of Community Court Program Kines| 
Supervisor Brown 

Ordinance amending Administrative Code by adding Section 10.1 17-124 to require the Controller to 

separately account for fines awarded to the City through community court dispute resolution programs and 
appropriating those funds to enhance public safety and the quality of life in the communities served by the 
community courts. 

(Adds Section 10.1 17-124.) 

10/12/0'). Rl ( I I VI- 1) AND ASSIGNED lo Finance an.1 I ahor ( nmmiiicc 

Heard in Committee Speakers Harvey Rose, Budget Analyst, Kimiko Burton-Cruz, Director Wayor's 
( 'riminal Justice ( 'ouncil, Supervisor Ammiano, Supervisor Yee ( ontinued ti> December I 

CONTINUED by the following >ole: 
Ayes: 2 - Yee, Ammiano 
Absent: 1 - Bierman 



992005 (Educational Revenue Augmentation Kund (AB 1661, SB 71l)| 
Mayor 

Resolution specifying the amount of ad valorem properly ta\ revenue shifted from each local agency within 

the City and County to the Educational Revenue Augmentation Fund established by state law in the City and 

County and agreeing to conditions imposed by the s t^'e tor allocation to the City and County of certain state 

funds. 

10/25/99. RECEIVED AND ASSIGNED lo Finance and I a nor Committee 

Heard in Committee Speakers Harvey R<".c Budget Analyst, Ed Harrington, Controller 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 



992019 (Amendment to the Police Officers Association 1996-2001 MOl regarding an Airport Canine Bomb 
Detection Premium for members assigned to the Airport Bureau| 

Ordinance implementing Amendment No. 4 to the 1996-2001 Memorandum of Understanding between the 

San Francisco Police Officers Association and the City and County of San Francisco adding language 

regarding an Airport Canine Bomb Detection Premium of S105.00 biweekly, effective July 24. 1999. 

(Department of Human Resources) 

10/27/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers Haney Rose. Budget Analyst; Alice iillagomez. Deputy Director, 

Department of Human Resources Supervisor Ammiano. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 6:01 PM on II I~V> 



Finance and Labor Committee 



Meeting Minutes 



November 17, 1999 



992020 [Settlement of Pay Grievance. Locals 790, 535, and 250] 

Ordinance authorizing settlement of the pay grievance of Service Employees International Union, AFL-CIO 
Local 790, 535, and 250 on behalf of its affected members filed pursuant to the Memoranda of Understanding 
between the Service Employees International Union, AFL-CIO, Local 790, 535 and 250 and the City and 
County of San Francisco in an amount not to exceed $360,000. (Department of Human Resources) 
10/27/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Har\'ey Rose, Budget Analyst; Alice Villagomez, Deputy Director, 
Department of Human Resources. 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 



992072 [Settlement of Grievance, Local 790, 535, and 250[ 

Ordinance authorizing settlement of the compensatory time off/night differential grievance of Service 

Employees International Union, AFL-CIO, Local 790, 535, and 250 on behalf of its affected members filed 

pursuant to the Memoranda of Understanding between the Service Employees International Union, AFL-CIO, 

Local 790, 535, and 250 and the City and County of San Francisco in an amount not to exceed 5125,000.00. 

(Department of Human Resources) 

1 1/3/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budgtt Analyst; Alice Villagomez. Deputy Director. 

Department of Human Resources. Amended to delete reference to Locals 535 and 250. New title. 

AMENDED by the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 

Ordinance authorizing settlement of the compensatory time off/night differential grievance of Service 

Employees International Union, AFL-CIO, Local 790,on behalf of its affected members filed pursuant to the 

Memoranda of Understanding between the Service Employees International Union, AFL-CIO, Local 790, and 

the City and County of San Francisco in an amount not to exceed SI 25,000.00. (Department of Human 

Resources) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 6:02 PM on 1 1 I " VQ 



Finance und Labor Committi'i 



Wetting Wnutet 



Sovembet /", 1999 



992026 |Purchase of4.09 acres of PG&K properly ( 2315 Cesar Chavez Street), leased bj DPW since 1986 for 
storage of materials, placement/use of modular buildings and parking, essential for DPWl continued 
operation | 

Resolution approving and authorizing an agreement between the < lit) and Count) nl San I rancisco. as Buyer, 
and Pacific Gas and Electric Company as Seller, to purchase real property located at 231 5 Cesar Chavez 
Street, known as APN Block 4343 I 01 1 A and SHI I 35-38-22 Parcel 1 , for a purchase price of Three Million, 
Eight Hundred Forty-One Thousand Dollars ($3,841,000); approving an agreement by the Cit) to release and 
indemnify PG&E for hazardous material--, appro ing certain environmental deed restrictions; approving the 
assumption of a billboard lease affecting the property; approt ing certain limitations on the City's remedies 
against PG&E for breach; adopting findings that the purchase agreement is consistent with the City's General 
Plan and eight priority policies of the City Planning Code Section 101.1; authorizing the Director of Property 
to execute documents, make certain modifications and take certain actions, and ratifying prior acts (Real 
Estate Department) 

(Fiscal impact i 

10/27 99, Kin i\i DANDASSIGNI D to Finance and I tbor Committee 

Heard in Committee Speakers Harvey Rose, Budget Analyst, Tony DeLucchi, Real Estate Department 

Continued to December I. 1999 
CONTINUED. 



992082 |Sutro Tower Health and Safety Task Force] 
Supervisors Ammiano. Teng. Lena, Bierman 

Resolution establishing a SutTO towel Health and Safety 1 ask I orce to make polic) recommendations to the 
Mayor and Board of Supervisors and setting forth the membership and duties of the task force 
II g/99, RECErV ED AND ASSIGN! Dtol inanceand Labor Committee 

Heard in Committee Speakers Supervisor immiano, Supervisor Yee Robert McCarthy, McCarthy & 
Schwartz; George Zaback, Forest Knolls, George Linn, Midtown Teniae. Jan Rulenour. Jules Human. Shaw 
Lin Chin. Carry Small. Christine Linnenhaeh. Banker Wade, KMTP- T\ 32. Ah Shepherd. Hispanic Broadcast 
Corp.. Gene /as trow, Sutro Tower. Inc . Dehra Stem Amendment of the Whole further amended to add 
Department of Public Health and Department q) Building Inspet turn as members of Task Force, and to make 
the City Attorney a non-voting member 

VMENDED, AN AMENDMENT OE THE WHOLE BEARING S \ME TITLE. 
RECOMMENDED \s IMENDEDb) the following vote: 

Ayes: 2 - Yee, Ammiano 

Absent: 1 - Bierman 



992095 |Charitable Distribution of Food| 
Supervisors Yee, Ammiano 

Hearing to consider the City's practice of confiscating food distributed by charitable organisations, including 
Food Not Bombs, and arresting members of the clergy and other volunteers for distributing food. 
1 1/8/99, RECEIVED AND ASSIGNED lo Finance and Labor Committee 
Heard in Committee Speakers: John Di Donna 
CONTINUED TO CALL OF THE CHAIR b\ the following \oxe: 

Ayes: 2 - Yee. Ammiano 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 6:02 P\1 on 1 1 I 7. V° 



Finance and Labor Committee Meeting Minutes November I", 1999 



ADJOURNMENT 



The meeting adjourned at 1 1:45 a.m. 



City and County of San Francisco 5 Printed at 6:02 PM on I l/l 7/99 



Public Library,Gov't Info. Ctr., 5 th Fir. 
Attn: Susan Horn 



.a54 



iM 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 



BUDGET ANALYST 



DOCUMENTS DEPT. 
NOV 1 5 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 



1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



November 12, 1999 
TO: JFinance and Labor Committee 

FROM: ^Budget Analyst 

SUBJECT: ^November 17, 1999 Finance and Labor Committee Meeting 
Item 1 - File 99-1811 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 3, 1999. 

Department: Port 

Item: Resolution approving a Ground Lease with Ferry 

Building Investors, LLC, for the rehabilitation of the 
Ferry Building, located on the Embarcadero and 
Market Street, as a mixed-use project and approving a 
negative declaration. 

Description: Charter Section 9.118 requires that the Board of 

Supervisors approve non-maritime leases of real 
property or contracts and agreements entered into by a 
City department extending for a period of ten years or 
more. The proposed resolution would approve a 66-year 
Ground Lease between the Port and Ferry Building 
Investors, a California Limited Liability Company 
(LLC), to renovate and restore the Ferry Building as an 
intermodal ferry terminal and mixed-use development. 

The Ferry Building is owned and maintained by the 
Port, which includes three floors of primarily office 
space consisting of a total of 291,872 square feet. 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Within the Ferry Building, the Port currently occupies 
41,934 square feet of office space, or approximately 14 
percent, and leases the remaining 249.938 square feet 
of space to approximately 93 other tenants, including 
three long-term commercial tenants. The three long- 
term commercial tenants include (1) the World Trade 
Club, a private business club, which occupies 29,521 
square feet of space, of which 25,863 square feet is 
under a long-term lease expiring in 2004 and 3,658 
square feet is on a month-to-month lease, (2) Limbach 
& Limbach, a law firm, which occupies 35,434 square 
feet, including 20,197 square feet in a long-term lease 
expiring in 2006 and 15,237 square feet in a month-to- 
month lease, and (3) Amtrak. which occupies 4,100 
square feet with a lease expiring in 2005. 

All of the Port's approximately 90 other tenants in the 
Ferry Building have month-to-month leases or leases 
which expire by the Fall of 2000. According to Mr. Paul 
Osmundson of the Port, most of the Fern* Building 
tenants have month-to-month leases, including t he- 
three long-term tenants who have month-to-month 
leases for a portion of their space because the Port has 
been in the predevelopment stage for the proposed 
renovation of the Ferry Building for over five years. 
Therefore, the Port limited the number of tenants with 
long-term leases in order to maximize the flexibility for 
future development of the Fern - Building. Mr. 
Osmundson advises. 

The proposed development of the Fern Building would 
consist of approximately 40.000 square feet of ground 
level commercial retail space, including fresh and 
prepared food markets and approximately 20,000 
square feet for four restaurants. The ground level, with 
a total of 105.000 square feet, will also contain Fern- 
passenger services, including ticketing booths, 
sheltered covered areas and a Central Concourse with 
major passageways connecting Market Street to the 
Bay, as well as loading and serving areas. 

The second and third floors will contain a total of 
approximately 164.000 square feet of space, including 
approximately 150.000 square feet of market rate office 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



space of which approximately 2,500 square feet will be 
used for the Port Commissions hearing room and 500 
square feet will be used for ancillary Port office space. 
The remaining approximately 14,000 square feet of 
space(164,000 less 150,000) would be interior public 
space. Overall, the new Ferry Building would contain a 
total of 269,000 square feet of space, resulting in a 
reduction of approximate ly 23,000 square feet of space 
from the current approximately 292,000 square feet 
within the Ferry Building. Mr. Alec Bash of the Port 
reports that the reduction in space is a result of the 
restoration of the Ferry Building to contain the original 
Nave Bay, which is a long narrow central hall rising 
higher than the adjacent portions of the building, which 
will open up the center portion of the building from the 
ground floor to the roof, by removing about one-third of 
the second floor and all of the third floor. The proposed 
development will also seismically retrofit and 
rehabilitate the Ferry Building to current fire and 
safety Building Code standards. 

The Lease Disposition and Development Agreement, 
between the Port and the Developer, which is not 
subject to the Board of Supervisors approval, is 
intended to establish the conditions for the 
development of the Ferry Building by the Developer 
and to state the conditions for the delivery of the 
Ground Lease for the Fern' Building and the site to the 
Developer by the Port. The Lease Disposition and 
Development Agreement between the Port and the 
Developer, Fern - Building Investors, identifies the 
scope of the development project and includes a 
schedule of performance, indemnification requirements, 
relocation of tenant provisions, and other issues related 
to the construction phase of the project. The Lease 
Disposition and Development Agreement was approved 
by the Port Commission on August 24, 1999 and will 
become effective when the Port Director signs the 
Agreement, which Mr. Osmundson advises will not 
occur until the Board of Supervisors approves the 
proposed Ground Lease resolution. The Lease 
Disposition and Development Agreement will then 
expire upon the completion of the Fern Building's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

construction, which is anticipated to be in 
approximately June of 2002. 

The proposed Ground Lease for the Ferry Building 
between the Port and the Ferry Building Investors, 
which is the subject of the proposed resolution, 
establishes the terms and uses for the Ferry Building 
and identifies the specific compensation and other 
requirements for each of the parties during the term of 
the Ground Lease. This Ground Lease would commence 
after specific conditions are met, which are identified in 
Attachment 1 to this report, provided by the Port. Mr. 
Osmundson advises that these conditions are expected 
to be achieved by January of 2001, and the Ground 
Lease would extend for 66 years, or until 
approximately 2067. According to Mr. Osmundson. the 
Fern - Building Investors proposed the Ground Lease 
term of 66 years, which is the maximum allowable 
under the State's Burton Act. 

Under the proposed 66-year Ground Lease, the 
Developer, Fern- Building Investors, will be responsible 
for all of the costs required for managing, improving, 
operating, maintaining and repairing the Fern- 
Building and the surrounding area. During this period 
of time, the Port would continue to own the Fern- 
Building and at the conclusion of the 66-year Ground 
Lease, the responsibility for the management, 
operation and maintenance of the Fern- Building and 
all improvements will revert back to the Port. 

Fiscal Provisions: Attachment 2, provided by the Port, identifies the 
major fiscal provisions of the proposed Ground Lease. 
As shown in Attachment 2. the Port will initially 
receive a minimum guaranteed rent of SI. 4 million per 
year, payable on a monthly basis of SI 16.667 per 
month, from the Fern Building Investors. In 
accordance with the proposed Ground Lease, if the base 
rent is not paid, such rent payments would continue to 
accrue, with annual interest costs of either ten percent 
or five percent over the Federal Resen r e Bank rate. 
whichever is ereater. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



This SI. 4 million minimum guaranteed annual rental 
income would be adjusted by the Consumer Price Index 
(CPI) every five years, subject to a minimum of two 
percent and a maximum of four percent per year, or a 
total of between ten to 20 percent every five years. This 
CPI rent adjustment would be paid by the Ferry 
Building Investors to the Port prior to any return on 
investment is paid to Fern- Building Investors, but. 
after the debt service, reserves and other operating 
expenses of the Ferry Building property are paid by 
Ferry Building Investors. If sufficient funds are not 
available to Ferry Building Investors to pay the Port 
this CPI rent adjustment, such payment may be 
deferred, interest-free, until such funds are available. 

In addition to the $1.4 million annual adjusted rent 
payments, as shown in Attachment 2, the Developer 
will pay the Port a Participation R.ent equal to 50 
percent of the net income received by the Developer, on 
a quarterly basis, beginning six months from the date 
that the Fern, 7 Building's net cash flow is positive. This 
Participation R.ent would be paid after deducting the 
annual adjusted CPI rent payments and after the 
Developer receives an 11 percent return on their 
equity. Therefore, the Port would only receive such 
Participation Rent, if Ferry Building Investors 
revenues exceed not only their operating and 
maintenance costs, debt service and reserves, but also 
the adjusted SI. 4 million annual CPI rent payments to 
the Port and an 11 percent return on equity to Ferry 
Building Investors. 

As outlined in Attachment 2, the proposed Ground 
Lease also contains specific provisions giving the Port 
an option to share in the net proceeds from the 
transfer, sale, assignment or refinancing of the Lease. 
If the Fern - Building Investors refinances the lease, the 
Port would be paid 30 percent of all net refinancing 
proceeds. Assuming that under such refinancing. Ferry 
Building Investors would be realizing funds and thus 
increasing the debt sendee cost, the refinancing would 
serve to reduce the amount of Participation Rent that 
would be available to be paid to the Port. Alternatively, 
if Fern Building Investors refinances to realize lower 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance and Labor Commit' 

November 17, 1999 Finance and Labor Commr I ing 

debt service costs, the Port would potentially realize 
increased Participation Rent, as the debt service costs 
are reduced. If Ferry Building Investors transfers or 
sells the Ground Lease, the Port can elect to receive 30 
percent of the net proceeds from the transfer or sale, 
but, in return, the Port would relinquish the 50 percent 
Rent Participation provision, although the Port would 
continue to receive the CPI adjusted monthly rent 
payments. 

Given these financial provisions, Attachme:. 
identifies the Port's likely projected revenues totaling 
$88.4 million over a 20-year period, assuming that the 
Ground Lease is refinanced after ten years and sold 
after 20 years. Although this analysis only reflects the 
initial 20-year period, during the remaining 46 years of 
the proposed 66-year Ground Lease, if the Ground 
Lease is sold, the Port would continue to receive the 
CPI adjusted monthly rent payments, or an estimated 
$64.4 million from the base rent and up to an 
additional $166 million from the CPI adjustn. 
assuming an average inflation rate of 3.2 percent, for a 
total of $318.8 million ($88.4 million plus $64.4 million 
plus $166 million). Mr. Osmundson also notes that if 
the Ground Lease is not sold or transferred, although 
the Port would not receive the estimated $24.5 million 
in sales proceeds as shown in Attachment 2, the Port 
would continue to receive the CPI monthly rent 
payments totaling up to approximately $230.4 million 
($64.4 million plus $166 million) and the 50 percent 
Rent Participation revenues for the subsequent years, 
which are estimated by Ferry Building Developers to be 
between approximately $3.4 million to $22.4 million 
annually. 

Comments: 1. Presently, the Port occupies 41.934 useable square 

feet of administrative office space in the Ferry 
Building. In addition, the Port indicates that they 
currently occupy 4,610 square feet of storage space in 
the Fern- Building, that will be moved to an off-site 
storage facility. The Port intends to relocate their 
administrative offices to Pier 1, under a 50-year lease 
and sublease arrangement with AMB Property 
Corporation, which was approved by the Board of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



Supervisors in April of 1999 (Resolution No. 329-99). 
Pier 1 is located immediately adjacent to the Ferry 
Building. Under the Pier 1 sublease, the Port will 
occupy 45,630 useable square feet of space, an increase 
of 3,696 square feet. In addition, as noted above, the 
Port will lease 3,000 square feet of additional space in 
the Ferry Building, for the Port Commission hearing 
room and related office space, for a total of 48,630 
square feet of space for the Port, as compared with the 
current 41,924 square feet, an increase of 6,706 square 
feet, or 16 percent. It should also be noted that the Pier 
1 sublease allows for the Port to occupy up to an 
additional 30,000 square feet of space during the 50- 
year term of the sublease. 

2. Under the previously approved Pier 1 lease and 
sublease arrangements, AMB Property Corporation will 
construct and manage a proposed new office building. 
When completed, AMB will occupy a portion of the new 
Pier 1 office space, sublease a portion of the new office 
space to the Port and sublease a portion of the new 
space to other outside tenants. Under such 
arrangements, the Port will pay AMB Property an 
initial rent of $153,051 per month for 52,475 square 
feet of office space, or approximately $2.92 per square 
foot per month ($35 annually). The sublease has 
various escalation clauses, which become effective over 
the 50-year term of the lease and sublease. 

Under these arrangements, previously approved by the 
Board of Supervisors, AMB Property will receive a 
return of 11 percent on their estimated construction 
costs of $34,511,526, or $3,796,268. Under a revenue- 
sharing arrangement, beginning in year six, and 
continuing for the remaining 45 years of the lease, 
AMB will pay the Port 50 percent of the total rental 
income received by AMB from all the tenants, including 
the Port and AMB. At the end of the 50-year term of 
the lease and sublease, the Pier 1 building and all 
improvements will belong to the Port. 

3. Pier 1 construction began in August of 1999 and is 
projected to be completed in December of 2000. As soon 
as it is completed, the Port anticipates relocating its 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo t<i Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

administrative offices and staff to the newly renov 
Pier 1 facility. The Ferry Building construction is then 
projected to begin immediately thereafter in January of 
2001. and to be completed by June of 2002. One of the 
conditions stated in the Ferry Building Lease 
Disposition and Development Agreement is that if the 
Port is unable to vacate the Ferry Building by January 
of 2001, due to a delay in the Pier 1 project, the Port 
has various options to extend that date, with graduated 
penalties in the form of per diem rent credits to be paid 
to Fern- Building Investors the further the date is 
extended. Conversely, the Ferry Building Inv. 
must meet their specific conditions by that date, or pay 
the Port S75.000 per month for their delays. 

4. Mr. Osmundson notes that when the renovations at 
the Fern- Building are completed, office and retail 
space in the Fern Building will rent at the then 
current market rates, which is estimated to be S53.89 
per square foot per year for office space, and $40.93 per 
square foot per year for retail space. Mr. Bash advises 
that the Port currently receives $16.68 per square foot 
per year from the World Trade Club and $32.64 per 
square foot per year from Limbaugh & Limbaugh, from 
their long-term leases at the Ferry Building. The 
proposed Fern Building office space rate of 
approximately $54 per square foot is $19 more per 
square foot, than the proposed rent of $35 per square 
foot, that the Port will pay for office space in Pier 1. 

5. Mr. Osmundson advises that the Port will not be 
required to pay Fern- Building Investors for tenant 
improvements or the use of the 3.000 square feet of 
additional space in the Fern Building, to be used for 
the Port Commission meetings and for an ancillary 
office. Currently, the Port occupies all of its Fern- 
Building space rent-free. However. Mr. Osmundson 
notes that Fern Building Investors will be able to rent 
out the Port Commission meeting room and the 
ancillary office space when the Port is not using such 
space, in accordance with a proposed sublease. Mr. 
Osmundson reports that the sublease between Fern- 
Building Investors and the Port for use of this 3.000 
square feet of space in the Fern- Building will be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

subject to the Board of Supervisors approval and is 
anticipated to be brought to the Board within the next 
three months. 

6. On May 15, 1998, the Port issued a Request for 
Qualifications (RFQ) to Rehabilitate and Lease the 
Fern- Building as a mixed-use project. Mr. Osmundson 
advises that this RFQ was advertised in the Wall 
Street Journal, Los Angeles Times, New York Times, 
Urban Land Magazine and numerous other 
publications, and that the RFQ was sent to over 100 
firms. In response, the Port received four qualification 
statements and subsequently, the Port invited the four 
respondents to submit proposals for development of the 
Ferry Building. The four respondents were: (1) Madison 
Marquette Realty . Sendees, (2) TrizecHahn 
Development Corporation, (3) Mentmore Development 
Company/Mills Corporation and (4) William Wilson & 
Associates. An analysis of the four proposals was 
conducted by the Port's staff and assisted by outside 
real estate consultants, Keyser Marston Associates and 
the accounting firm of KPMG Peat Marwick. On 
November 17, 1998, the Port staff recommended and 
the Port Commission selected William Wilson & 
Associates, located in San Mateo, as the developer to 
enter into an Exclusive Right to Negotiate Agreement 
for the Ferry Building (Resolution No. 98-114). 

William Wilson and Associates subsequently merged 
with Cornerstone Properties, a national real estate 
investment trust, and is now known as Wilson 
Cornerstone. Wilson Cornerstone created a 
development entity known as Ferry Building Investors, 
LLC, to act as the developer for the Fern- Building 
project. The Port advises that Wilson Cornerstone, the 
parent company of Ferry Building Investors, is also 
currently constructing the Gap Headquarters building, 
at The Embarcadero and Folsom Street and was the 
developer for the restoration of the Flood Building, both 
landmark buildings in San Francisco. The Board of 
Directors and the Officers of Wilson Cornerstone, Inc. 
are identified in Attachment 3 provided by the Port. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance and Labor Com 

November 17, 1999 Finance and Labor Committee Meeting 



shown in Attachment 4 provided by the Port. 

Building Investors estimate project construction 
costs of approximately $70 million, which includes 
$2,683,333 of Ground Lease minimum rental payments 
to the Port during the construction period. According to 
Mr. Osmundson, the construction management firm of 
O'Brien Krietzberg has reviewed these estimates for 
the Port and determined them to be reasonable. 
However, Ms. Diane Millner of the City Attorney's 
Office reports that if the actual costs exceed the 
developer's estimates, then Ferry Building Investors 
would be liable for any cost overruns, and not the Port. 
However, Ms. Millner notes that any additional costs 
that are incurred by Ferry Building Investors will 
ultimately affect the Port's revenues, since the 
proposed project has shared public/private 
Participation Rent provisions. 

8. The Ferry Building is a City landmark listed on the 
National Register of Historic Places. After construction 
is completed, the Developer expects to receive 
certification from the National Park Service that the 
construction complies with the Secretary of Interior's 
Standards for Rehabilitation, making the project 
eligible for a 20 percent Federal Historic Preservation 
Tax Credit. Mr. Osmundson advises that these Tax 
Credits, which are similar to the Federal Affordable 
Housing Tax Credits, will enable the Fern. - Building 
Investors to increase the amount of cash available for 
the project, which will potentially increase the amount 
of net cash that will be available to split with the Port 
under the Rent Participation provisions. 

9. Currently, the Ferry Building has 41 parking spaces. 
Under the proposed Fern - Building development, there 
would be no on-site parking. The Budget Analyst notes 
that the Planning Department in a letter of February 
16, 1999 granted an exemption to the adjacent Pier 1 
project from all Planning Code off-street parking 
requirements, which was previously approved by the 
Board of Supervisors. The current Planning Code 
requirement is for one off-street parking space per 500 
square feet of office and retail space development and 
slightly higher off-street parking requirements for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

restaurant space. Based on the projected use of the 
269,000 square feet of the Fern 7 Building project, 514 
off-street parking spaces would be required. However, 
according to Mr. Bash, this parking requirement may 
be reduced based on the Ferry Building's already 
existing deficit of parking. Mr. Bash advises that the 
developers for the Ferry Building project will be 
seeking an exemption from the Planning Department 
for such off-street parking requirements. 

10. Under the proposed agreements, Fern- Building 
Investors will be required to carry various types of 
insurance (e.g., property insurance, commercial 
liability insurance, business insurance, etc.) and the 
agreements contain various indemnification provisions. 
Mr. Keith Grand, the City's Risk Manager reports that 
he has reviewed the insurance and indemnity 
provisions and he recommends the following 
amendments be incorporated in the Ground Lease, to 
further protect the City: (1) In Section 18.1(b), General 
Insurance Requirements, the Lease currently states 
that all insurance shall be carried under a valid and 
enforceable policy issued by insurers of recognized 
responsibility that are rated Best A-:VI or better. Mr. 
Grand recommends that the rating be changed from A- 
VI to A- VIII, which is a higher rating and is the City's 
usual minimum requirement for insurance carriers; (2) 
In Section 18.2, Port Entitled to Participate, the Lease 
currently states that the Port shall not be entitled to 
participate in and consent to any settlement, 
compromise or agreement with respect to any claim for 
any loss in excess of $5 million covered by the 
insurance required to be carried, if the tenant has 
agreed in writing to commence and complete 
restoration. Mr. Grand advises that the Port should be 
able to participate in such insurance settlements, that 
would otherwise go solely to Fern - Building Investors. 

11. The proposed resolution would also adopt the 
findings with respect to the Final Negative Declaration 
for the Ferry Building Project, which was issued by the 
Planning Department on October 1, 1998. On August 
24, 1999, the Port Commission adopted the Final 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

11 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Commr ;ing 

Negative Declaration and mitigation monitoring 
program for the Ferry Building Project. 

12. In accordance with the proposed conditions for 
entering into the Ground Lease, as shown m 
Attachment 1, the Port must deliver the Ferry Building 
to Ferry Building Investors free of all tenants and 
occupants, except the World Trade Club (WTC), 
Limbach & Limbach and Amtrak, the three tenants 
with long-term leases in the Ferry Building. 
Furthermore, as stated in the Lease Disposition and 
Development Agreement. Ferry Building Invest< : 
responsible, at no cost to the Port, for the relocation or 
buyout of these three long-term tenants, prior to 
beginning renovations of the Ferry Building. Mr. 
Osmundson advises that the World Trade Club is 
currently objecting to (1) potential termination of its 
short-term (month-to-month) lease provisions, (2) 
potential termination of its short-term parking lease on 
adjacent Port property and (3) the developer not 
negotiating in what the World Trade Club considers to 
be good faith. 

13. In addition to the $88.4 million that the Port is 
estimating it will receive over the first 20 years of the 
proposed Ground Lease, Mr. Osmundson reports that 
the City will receive approximately S700,000 annually 
from Possessory- Interest Taxes from Ferry Building 
Investors and approximately $300,000 annually from 
Sales Taxes generated by the proposed retail 
establishments, or a total of $1.0 million annually. 
Currently. Mr. Osmundson reports that the City 
receives approximately $250,000 annually from 
Possessory Interest Taxes paid by the various leasees 
in the Fern - Building and approximately $10,000 
annuaDy from Sales Taxes generated by the few retail 
establishments, or a total of S260.000. Possessory 
Interest Taxes are a means for the City to collect 
Property Taxes on public property that is used for 
private purposes. Overall. Mr. Osmundson estimates 
that the proposed Fern - Building project will generate 
an additional $740,000 of annual revenue for the City"s 
General Fund. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



14. As discussed above, the Port currently owns, 
operates and maintains the Ferry Building, including 
providing security, janitorial, garbage, utilities, 
insurance, maintenance, property management and 
administrative support functions. As shown in 
Attachment 5 provided by the Port, in FY 1998-99, the 
Port spent a total of $1,350,000 on such services for the 
Ferry Building. During FY 1998-99, the Port generated 
a total of $2,553,144 in gross revenues from the Feny 
Building, thus realizing ($2,553,144 gross revenues less 
$1,350,000 of costs) $1,203,144 of net revenues for the 
Port. 

It should be noted that by comparison, Ferry Building 
Investors projects that in 2003, the first year of 
occupancy for the new Ferry Building, total gross 
income will be approximately $12 million and operating 
expenses, including taxes (which the Port did not incur) 
will be approximately $3.2 million, resulting in a net 
operating income of approximately $8.8 million. After 
payment of the Port's base $1.4 million annual rent and 
estimated debt service payment of $3.6 million, Ferry 
Building Investors projects realizing a net cash flow of 
approximately $3.8 million, this first year of operation. 

15. Under the proposed Ground Lease provisions, the 
Ferry Building Investors will assume responsibility for 
the construction, operation and maintenance of the 
Ferry Building beginning in January of 2001. 
Therefore, all of the $1,350,000 of costs that the Port is 
currently incurring to support the Ferry Building's 
operations and maintenance should cease. In addition. 
Mr. Osmundson advises that Ferry Building Investors 
will be responsible for maintaining the exterior area, 
up to 20 feet, surrounding the Ferry Building, which 
the Port currently maintains. Mr. Osmundson could not 
provide the Budget Analyst with an estimate of the 
additional costs that the Port currently incurs to 
maintain this exterior area, which will also no longer 
be necessary once Ferry Building Investors assumes 
control of the interior and exterior Fern' Building 
operations and maintenance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



Mr. Osmundson advises that the Port should be able to 
reduce its contracts for security and janitorial services 
and for the direct garbage, utility and insurance costs, 
at an estimated total annual cost of $1,087,000. 
However, Mr. Osmundson reports that the Port does 
not plan to cut back the reserve funds or the 
maintenance, property management and 

administrative staff that are currently assigned to the 
Fern- Building, at an estimated annual cost of 
approximately $263,000. Instead, Mr. Osmundson 
reports that the Port intends to reallocate such funds 
and staff to other Port properties, as needed. How 
the Budget Analyst recommends that the FY 2000-2001 
budget for the Port be reduced I >0. or the six 

month portion of the estimated S 1.350,000 annual 
costs, which would no longer have to be incurred by the 
Port, assuming a January of 2001 transfer of the 
property from the Port to Ferry Building Investors. 
Furthermore, the Budget Analyst recommends that an 
additional $675,000 be reduced from the FY 2001-2002 
Port budget, to reflect the additional six months of 
savings during the following year. 

16. On September 10, 1999, Mr. Douglas Wong, the 
Executive Director of the Port issued a memorandum to 
the Members of the Finance and Labor Committee 
responding to the request for information on the 
development options available to the Port in restoring 
and rehabilitating properties, such as the Fern- 
Building. This memorandum discussed the Port's 
development options of having the (1) Port as 
Developer, (2) Port as Ground Lessor, and (3) Port as 
Ground Lessor under a Private-Public Partnership. The 
conclusion drawn in this memorandum is that "the Port 
will improve its chances of creating a successful project 
(thereby maximizing its revenue) by bringing in the 
capital resources and skills of Wilson Cornerstone as 
the developer." with the Port as Ground Lessor under a 
Private-Public Partnership. 

The Budget Analyst notes that in both tne Best and 
Conservative Case Projections included in this 
memorandum, the Port assumes that Fern- Building 
Investors will sell the Ground Lease in year 20. thus 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
H 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



realizing an additional $22.7 million to $39.7 million of 
revenue for the Port, under these two private developer 
scenarios. Similarly, as reflected in Attachment 2, the 
Port assumes not only a sale of the Ground Lease in 
year 20, netting the Port an estimated $24.5 million, 
but an additional $14.3 million from the Port's share of 
the refinancing proceeds in year 10 of the Ground 
Lease. Together, these two provisions would yield the 
Port $38.8, or approximately 44 percent of the total 
estimated $88.4 million projected over the 20-3 7 ear 
period. Yet, while these scenarios assume the developer 
will sell the leasehold interest in year 20, Mr. 
Osmundson states that the Port cannot assure or even 
predict when or if the developer would ever refinance, 
transfer or sell the proposed Ground Lease. 

17. If the Ferry Building Investors want to sell, 
transfer, assign or refinance the Ferry Building Ground 
Lease, such sale, transfer, assignment or refinancing 
would not be subject to the Board of Supervisors 
approval, according to Mr. Osmundson, unless there 
were to be amendments to the Ground Lease. Mr. 
Osmundson also advises that the Port cannot 
reasonably withhold the Port's consent of such a sale, 
transfer, assignment or refinance. However, given the 
66-year long-term length of the proposed Ground Lease, 
and the likelihood that the lease may be sold at 
sometime in the future, the Budget Analyst 
recommends that such future sale, transfer or 
assignment of the proposed Ground Lease from the 
Ferry Building Investors be subject to review and 
approval by the Board of Supervisors. 

18. The Budget Analyst raises the following concerns 
about the proposed Ground Lease for the Fern- 
Building: (1) the Port would occupy 3,000 square feet of 
additional space in the Ferry Building, in addition to 
the already increased Port administrative space of 
45,630 square feet, and additional expansion potential 
of 30,000 square feet in the adjacent Pier 1 facility: (2) 
there is not proposed to be any parking available at the 
Ferry Building, although the Planning Code 
requirement is for 514 off-street parking spaces: (3) the 
City's Risk Manager recommends two insurance 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Memo in Finance and Labor Commit I 

November 17, 1999 Finance and Labor Committee .Meeting 

provisions be changed to more adequately protect the 
City, as described in Comment 10 above; (4) the World 
Trade Club, an existing long-term tenant, has raised 
various objections; (5) the Port's intention to continue 
to maintain the same level of Port maintenance, 
property management and administrative staff and 
associated costs of approximately S263.000, after the 
Ferry Building is transferred to Ferry Building 
Investors for their operation and maintenance; (6) the 
reasonableness of the Port's financial analysis to 
include future sale of the Ground Lease for bet . 
$22. 7 million to $39. 7 million in net revenues to the 
Port, when the likelihood of such an event is unknown; 
and (7) any future transfer, sale or assignment of the 
proposed 66-year Ground Lease for the Fern- Building 
would not be subject to the Board of Supervisors 
approval, unless amendments were made to such 
Ground Lease. 

19. Ms. Millner advises that the Board of Supervisors 
cannot amend the proposed Ground Lease, which is the 
subject of this proposed resolution. According to Ms. 
Millner, the Board of Supervisors can only approve, 
disapprove or continue the proposed resolution. 
Therefore, the Budget Analyst recommends that the 
Board of Supervisors continue the proposed resolution, 
to permit the Port to renegotiate with Ferry Building 
Investors regarding the issues raised in this report, as 
summarized in Comment No. 18. 

20. Mr. Osmundson requests that the proposed 
resolution be continued to the Call of the Chair to 
permit the Port staff sufficient time to discuss the 
concerns raised by the Budget Analyst and to seek 
direction from the Port Commission. 

Recommendations: Continue the proposed resolution to the Call of the 
Chair, as requested by the Port. In addition, request 
that the Port include the following amendments in the 
Ferry Building Ground Lease: (1) the City's Risk 
Manager's recommended changes pertaining to 
insurance provisions, as described in Comment 10 
above; and (2) require that any future sale, transfer or 
assignment (except for assignment for the purpose of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



financing) of the Ground Lease, be subject to approval 
by the Board of Supervisors, as described in Comment 
17 above. In addition, before the Board of Supervisors 
approves the proposed resolution, the Port should 
provide a plan in writing to the Board of Supervisors on 
specifically how the Port will reduce their FY 2000-01 
budget by $675,000, and the Port's FY 2001-02 budget 
by an additional $675,000, for a total annualized 
reduction of $1,350,000, in accordance with our 
analysis as described in Comment 15 above. 

Furthermore, the Budget Analyst considers approval of 
the proposed resolution to be a policy matter for the 
Board of Supervisors, due to the numerous issues 
raised in Comment No. 18 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Attachment 1 



Following are the conditions that must be satisfied for the escrow to close, whereby the Lease and 
the site will be delivered to Developer: 

• Port has approved the construction design documents. 

• Port has issued a full building permit or a site permit 

• Developer has submitted to the National Park Service Part 2 of the Historic Preservation 
Certification Application. 

• Developer has received all required approvals from regulatory agencies, including BCDC. 

• Developer has submitted to the Port an updated Construction Budget, and evidence of a 
guaranteed maximum price contract for the construction of improvements consistent with the 
Construction Budget. 

• Developer has provided the Guaranty. 

• Pier 1 is completed. 

• Developer has submitted evidence regarding the establishment of an investment entity to 
utilize Historic Tax Credits. 

• Developer has submitted a certificate of insurance for required insurance coverage and the 
title company is prepared to insure title. 

• Executed copies of the Lease have been submitted into escrow. 

• The Ferry Building is free of all tenants and occupants, except VVTC, Limbach and Amtrak. 

• Developer has submitted a First Source Hiring Agreement and an HRC Certificate of 
Compliance and the Port has approved them. 

• Port has completed certain offsite work in the Apron Area and issued permits to enter to 
Developer for staging and other construction activity. 

• There have been no adverse changes in the condition of the site. 



16 



IV. FINANCIAL ANALYSIS 

As previously discussed, under the Lsase the Port stands to receive revenue from the project as 
follows: 

Minimum Rent: Guaranteed S 1 .4 million annually 

Annual Consumer Price Index f"CPI") Adjustment 3etween 10% and 20% every five years, 
after operating expenses, reserves and debt service. Unpaid C?I adjustments accumulate. 

Participation Rent: 50% of net cash flow, after 1 1% developer return on equity. Unpaid return 
on developer equity accumulates. 

Participation in Refinance Proceeds: Port receives 30% of net proceeds from refinancing. 

Participation in Transfer or Sale Proceeds: /Port can elect to receive 30% of net proceeds from a 
transfer or sale, but thereafter relinquishes its 50% participation in net cash flow. 

Tne scenario presented below is for a 20 year period, assuming 3% inflation, a refinance after 10 
years, and a sale after 20 years. 



Port Revenue 

Minimum Rent 
CPI Adjustment Rent 
Participation Rent 
Refinancing Proceeds 
Sale Proceeds 
TOTAL 



Cumulative Port Revenue, Developer Projected Rents 
S28.0 million 
S5.6 million 
SI 6.0 million 

514.3 million 
S24.5 million 

588.4 million 



19 



QC1 21 '99 01 :35PM PORT OF SF EXECUTIVE 



Attachment 3 



CORNERSTONE PROPERTIES INC 
BOARD OF DIRECTORS 



OFFICERS 



i'lLLIAK NELSON III 

Chairman of Cornerstone Properties Inc. 

IOKN t. MOODY 

Prejiaer,: ana Chief Executive Off.ur of Cornerstone Progenies fne, 

DICK VW( Dlfc" »OS 

RiaJ Estate Consultant tc Pemiscnfonds PGGM 

CECIL D. CONLII 

Managing Director of Rodamco and Chairman of CGR Advisors 

KOPtfCV C. DIKOCK 

Executive Vice President of Cornerstone Properties In: 

ILaU IAGU 

Chairman of the Center for Real Estate a: the 
Massachusetts InstituU of Technology 

DOWAID G. FISHIt 

Chairman and Founder of Gap Inc. 

BANDAC". A. HACK 

Founding Member of Nassau Capital LLC 

DB. KAXi.-LVDWIG KBBXAKS 

Finarciai Consultant 

HAMS C. MACTNEB 

Vice Chairman of Simon Property Group 

DB. IUTZ KIIUNCIK 

Managing Director of Deutsche Bant AG 

CRAIC B. STaPLETOK 

fr«io«n: 0/ Marsh <r. Mclennan Rea! Estate Advisors 

MICK Ax. I. C. TOPHAM 

Executive Viet President and Managing Director of 'dines 

JAK VAK DEftVUST 

Director of Real Enatc investments fo' Pcnsioenfonds PGGM 



W'.LLLAK VliJOff 11! 

Chairmen sfihe Board of Directors 

fOKV L MOODY 
PrtJiO>i;l or.c 

Chie/Encur./r O^-cer 

K Hi VA.M MVf» 

Oue/Oftersunr, 0~; C r ana' 
General Csur.it 

tosifirc otuocK 
Frmfru V^t PmiiM 

lOHXi-KAimT/oy ::: 

Chie/5eveioprrier.: Ojiee' 

M r. KAH3KEY 
Senior Via PlBJdfnJ and 
CnicfFwnciai OffieU 

R. KATTKS* MOLaN 

Cmef h»atmtr.t Officer 

;»nn» akci 
Senior Vce Prsaimi 
Aact M«ns|:me-.: 

ICCTT K. MUBMM1 
Senior Via ?rt!.Cf.'. 
Abc Management 

thoma$ f. iomn 

rruc'Aeirur.isrraOi* O^iccr 
cnaSocarv 

TMOMASA Utt 

Vice pKsocn: and Trec;--:- 

a. robot paeatt: 

Senior Via Pnstctn:. leasing 

BBtV I. HICM 

Senior Vice Presiacnt 
Asset Hanagfrr.tr.: 

THOMAS f I0UIVAM 
Senior Vice Prts^eni 
Dtvtiofment 

lAvr. i. ajtov 

Viet rTOJaen:, Information Services 

ANDE7V C B»5«TJ 

Via Prtsiaer.:, Leasing 



|OK W. CLABt 

Vice president, Interr.. 

EDWABD ). DOKKIM.Y. IB. 

Vicc Preiser.:. Property Stnna 

STEVtK D lUtOI 

Vice President 
Investment Management 

cregoryg. ror;& 
Via Pmidtnl, Leasing 

CMABLES X. HAUTIY 

Vice Presisent 

SoulKerr. CaJ:fo-nia Regvon 

BRUCl A. liViS 

Via PreruUn: Engineerng 

RICHARD A. V.Tf.l 

Vice President 

P ropery MMMfEMCM 

XHLAY Y. lOKf. 

Vice Prtrioen:, Development 

KAlIW O. MAAS 

Vice Prcsiaent 

LaREY m. kilo 

Vice PrEiiaent. Boston .Region 

|OHK C MOi 

I ice presidcr.:. Leasing 

TTBEKCI I R.LASAK 

Vice PrBStdfnX, Development 

riAMca H.DOUSI, jr. 

Vice Prtudou, Acquisitions 

uchau spb:kc*atib 

Vce Prtsncent. Development 

ROBEXTT SOBBENTjfO 

Vice President, Assr. Manag** 

jcott a. mrnim 

Vce Preiaeni, Ftmnsj-e kef- 
cauakdba |. tobk:lpsow 

Vice prcjiaen:. Human Rewi3 

MAXItH 1. *'aXO 

Vice Prtsideni, Eos'. Bay AMI • 



20 



Attachment 4 



FERRY BUILDING LEASE DISPOSITION AND DEVELOPMENT AGREEMENT 
Form of Bucket 



Construction Budget: 








Acquisition of Ground Lease 






S927,000 


Lease Modification Costs 






5,109,929 


Environmental Mitigations 






3,750,000 


Entitlements 






281,000 


Architects & Engineers 






4,334,212 


Shell Construction 






37,832,500 


Retail Tenant Work 






968,415 


Office Tenant Work 






5,982,500 


Retail Leasing Commissions 






849,410 


Office Leasing Commission 






1,037,219 


Marketing Expenses 






178,000 


Legal 






222,000 


Financing Fees 






756,000 


Development Fee 






2,610,127 


Contingency 






2,037,500 


Development Period Interest 






2,638,551 


Operating Shortfall: 








Development Penod Ground 








Rent 


S2.6S 


3.333 




Development Period Operating Expenses 


1.92 


4,150 




Less: Development Period 








Income 


(4.221 


,866) 




Total Construction Budget 






385,617 




S69. 899,980 



21 



Attachment 5 



Ferry Building/VVorld Trade Center 
Expenses 

Fiscal Year 1998-99 





Estimated 




Annual Amt. 


Description 


(SOOO's) 


Security 


$128 


Janitorial 


370 


Scavenger 


39 


Electricity 


340 


Gas 


72 


Water/Sewer 


38 


Insurance 


100 


Maintenance & Reserves 


176 


Administrative 


87 


TOTAL 


$1,350 



22 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Item 2 -File 99-1619 

Department: Airport 

Item: Ordinance amending Article XIII, Chapter X of the 

Administrative Code by adding Section 10.114-3 to establish a 
new Special Account known as the "Airport Promotion and 
Event Account"; to authorize the Airport Commission to accept 
cash donations, property, and personal services which would 
accrue to the Special Account; to authorize the Airport 
Commission to expend monies from the Special Account; to 
carry over unexpended monies in the Special Account from one 
fiscal j r ear to the next; and to require quarterly reports to the 
Board of Supervisors on revenues to, and expenditures from, 
the Special Account. 

Comment: The Airport has requested that this item be continued until 

the December 1, 1999 meeting of the Finance and Labor 
Committee. 

Recommendation: In accordance with the Comment above, continue the proposed 
ordinance until the December 1, 1999 meeting of the Finance 
and Labor Committee. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Item 3 - File 99-1923 

Department: Mayor's Criminal Justice Council 

Item: Ordinance amending Article XIII, Chapter 10, Part 

I of the San Francisco Municipal Code 
(Administrative Code) by adding Section 10.117- 
124 to require the Controller to separately account 
for fines awarded to the City through Community 
Court Dispute Resolution Programs and 
appropriating those funds to enhance public safety 
and the quality of life in the communities served by 
the Community Courts. 

Description: Community Courts, according to Mr. Travis Kiyota 

of the Mayor's Criminal Justice Council, are a State 
authorized means of diverting quality of life 
misdemeanor offenses from the traditionally 
backlogged courts and criminal justice system to 
the community where the offenses occurred. Mr. 
Kiyota advises that the quality of life misdemeanor 
cases referred to Community Courts include open 
alcohol containers, petty gambling, loitering, shop 
lifting, possession of small quantities of marijuana, 
grafitti, etc. Mr. Kiyota advises that in November 
of 1998, the City created two Community Courts in 
the City, one in the Bayview and one in the 
Oceanview-Merced-Ingleside (OMI) Community. 

The California Community Dispute Sendees, a non- 
profit organization, with the assistance of the 
District Attorney's Office, trains community 
residents and merchants to sit as the three 
volunteer panel members on each Community 
Court to hear these misdemeanor cases. The 
District Attorney's Office forwards letters to the 
individuals cited for the misdemeanor cases 
referring them to the specific Community Courts at 
a set-aside date and time. Alternatively, the 
individual cited with the misdemeanor can choose 
to go through the traditional court system to settle 
the matter. 

During the hearing before the Community Court, a 
Police Officer is present to read the case report. The 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

24 



Memo to Finance and Labor Commitl 

November 17, 1999 Finance and Labor Committee Meeting 



panel members then question the individual 
regarding the misdemeanor case. The panel then 
decides on the case, and if found guilty, the panel 
typically gives the individual a choice of paying a 
fine or performing community service. 

If the individual chooses community service, they 
are referred to the Pretrial Diversion Project, a 
non-profit organization, that provides community 
services, under contract with the Sheriff and the 
Department of Parking and Traffic. If the 
individual chooses community service, the 
individual will be required to perform the 
community service hours in the community where 
the misdemeanor occurred. Mr. Kiyota reports that 
those individuals choosing to pay the fine are 
required to pay the fine to the City and County of 
San Francisco. According to Mr. Kiyota, the 
California Community Dispute Services collect.- the 
fines and forwards the checks to the Fiscal Division 
of the Police Department, which deposits the funds 
into a Bank of America account, known as the 
Community Court Dispute Resolution Program 
Funds. 

As of November 3, 1999, Mr. Kiyota reports that 
the Community Court Dispute Resolution Program 
had a balance of $12,262 in the Bank of America 
account, including $11,137 from the Bayview and 
$1,125 from the OMI. To date, Mr. Kiyota advises 
that none of the collected fines have been expended. 
According to Mr. Kiyota, if the proposed ordinance 
is approved, all of these funds will be transferred to 
the proposed Controller accounts. 

Mr. Kiyota advises that the OMI Community Court 
is planned to be expanded to include the entire area 
covered by the Taraval Police Station, and to be 
renamed the Taraval Community Court. The 
proposed ordinance would require the Controller to 
separately account for the penalties, fines and 
other payments awarded to the City and County by 
(1) the Bayview Community Court, (2) the Taraval 
Community Court and (3) any additional 
Community Courts established in other San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Francisco neighborhoods. Furthermore, Mr. Kiyota 
reports that the penalties, fines and other 
payments referenced in the proposed ordinance 
would include the fines received by the Community 
Courts from the individuals cited for the 
misdemeanors as well as any other gifts of funds 
that the Community Courts might receive. Mr. 
Kiyota reports that to date, the Community Courts 
have not received any gifts of funds, but there has 
been no means to accept such gifts. 

Under the proposed ordinance, funds deposited into 
each of these Community Court accounts could only 
be expended to enhance public safety and the 
quality of life in that specific community (i.e., 
Bayview, Taraval or other - neighborhood 
communities), and to support the specific 
Co mm unity Court Programs. In other words, the 
funds awarded by the Bayview Community Court 
could only be expended to enhance public safety 
and the quality of life in the Bayview Community 
and to support the Bayview Community Court 
Program. 

In accordance with the proposed ordinance, the 
Director of the Mayor's Criminal Justice Council, in 
consultation with the Police Chief, District 
Attorney, Chief Executive Officer of the Superior 
Courts and the Controller shall establish guidelines 
for the specific disbursement of the penalties, fines 
and other payments, consistent with the guidelines 
outlined above. Any expenditure of S5.000 or less 
could then be disbursed by the Director of the 
Mayor's Criminal Justice Council, in consultation 
with the Police Chief, District Attorney and the 
Chief Executive of the Superior Court. Any 
expenditure in excess of $5,000 would also require 
appropriation approval by the Board of 
Supervisors. As stated in the proposed ordinance, 
all costs that may be incurred by any City 
department in administering these monies shall be 
absorbed within that department's existing budget. 

Comments: 1. According to Mr. Eugene Clendinen of the 

Mayor's Criminal Justice Council, the initial two 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



i io to Finance and Labor Commn; 
November 17, 1999 Finance and Labor Commiti' 



Community Courts were established as a pilot 
program to address minor misdemeanors occur 
in these communities, that are diverted from 
Trial Courts. Mr. Clendinen reported that th 
two Community Courts were established through 
an initial $50,000 Federal law enforcement block 
grant and have been continued with a $150,000 
Federal Department of Justice prant. Accordm 
Mr. Kiyota, the current Federal law enforcement 
grant ends in April of 2000. Mr. Kiyota reports that 
if these projects are determined to be successful, 
the Mayor's Office will recommend other funding 
sources to continue the operations of these 
Community Courts. 

2. Mr. Ed Harrington reports that he has reviewed 
the proposed ordinance, which would require the 
Controller to separately account for the fines 
awarded to the City through the Community Court 
Dispute Resolution Programs. Mr. Harrington 
advises that this is a preferable arrangement than 
an earlier version of this legislation which had 
required the creation of additional Special Funds 
by the Controller's Office. According to Mr. 
Harrington, any interest earnings from the 
proposed funds will accrue to the City's General 
Fund. 

3. Mr. Kiyota advises that the proposed ordinance 
specifically states that "No cost that may be 
incurred by any City department in administering 
these monies shall be recovered therefrom." 
Therefore, Mr. Kiyota reports that under the 
proposed ordinance, neither the Controller nor any 
other City department would receive 
reimbursement for the costs of administering the 
proposed accounts. The costs to administer these 
funds are generally minimal, according to Mr. 
Harrington. However, Mr. Harrington advises that 
if maintaining these accounts becomes a problem, 
the Controller's Office will notify the Board of 
Supervisors at that time, in order to remedy the 
situation. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



4. As noted above, the current two Community 
Courts have been initiated with grant funds, which 
are due to terminate in April of 2000, 
approximately five months. Based on discussions 
with the Mr. Kiyota, although the funds can be 
used to support the Community Court programs, 
the main purpose of the proposed ordinance is to 
expend the funds collected by the Community 
Courts to enhance public safety and the quality of 
life in each of the Community Court communities. 
Mr. Kiyota furthermore notes that the funds 
generated by the Community Courts are not 
sufficient to sustain the overall operations and 
maintenance of the Courts. 

Mr. Kiyota reports that each Community Court 
currently has two staff members, one from Pre-trial 
Sendees and one from the California Communit3 T 
Dispute Services, both non-profit organizations. 
Mr. Kij'ota estimates that the operating costs for 
each of the Community Courts is approximately 
$70,000 to $80,000 annually. Therefore, the Budget 
Analyst believes that a funding source should be 
identified to provide the ongoing operations and 
administration for the Community Courts, if they 
prove successful. 

5. In accordance with the proposed ordinance, 
appropriation of funds less than $5,000 would not 
be subject to the Board of Supervisors approval. 
The Budget Analyst notes that since the creation of 
the two Community Courts in November of 1998, 
approximately one year ago, a total of onry $12,262 
has been generated by the fines and penalties 
assessed by the two Community Courts. Given the 
amount of funds currently being generated by each 
of these Community Courts, it is not likely that 
there would be allocations of funds greater than 
$5,000 in the near future. Mr. Kiyota responds that 
he anticipates the expenditures would be in 
increments of approximately $500 or less, which, in 
accordance with the proposed ordinance, would not 
be subject to the Board of Supervisors approval. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

28 



Memo to Finance and Labor Commitl 

nilur 17. 1999 Finance and Labor Comm: ;ing 

Recommendation: Approval of the proposed ordinance is a policy 

matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET^VALYST 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



Item 4 - File 99-2005 

Department: 

Items: 









Description: 



Controller 

Resolution specifying the amount (S159.296.139) of FY 1998- 
99 ad valorem Property Tax revenue shifted from each local 
agency within the City and County to the Educational 
Revenue Augmentation Fund (ERAF) established by State 
law and agreeing to conditions imposed by the State for 
allocation to the City and County of certain State funds. 

Ms. Ann Care\- of the Controller's Office advises that under 
State Assembly Bill (AB) 1661, the State intends to allocate 
to counties a statewide total of S150 million in AB 1661 State 
Relief Funds. The AB 1661 allocation will be based on: 1) 
population and 2) the amount of local Property Taxes to be 
transferred by the counties to school districts for FY 1998-99 
under the State-mandated Educational Revenue 
Augmentation Fund (ERAF). 

State law requires the County Auditor in each county to 
transfer a portion (21.2 percent in FY 1998-99) of ad valorem 
Property Tax revenue from all counties, cities, and special 
districts into the State's ERAF. The ERAF monies are then 
redistributed by the State to local school districts and 
community college districts. Under Assembly Bill (AB) 1661, 
counties may apply for State Relief Funds to partially offset 
the funds transferred by the county to the State in 
accordance with State law. 



Comments: 



The proposed resolution would comply with State 
requirements for the City and County to receive the AB 1661 
State Relief Funds. The proposed resolution: (a) certifies that 
for FY 1998-99 the City and County shifted S159.296.139 m 
ad valorem Property Tax revenue into the State's ERAF: (b) 
directs the Clerk of the Board to send a certified copy of this 
resolution and other required documentation to the State 
Controller's Office; (c) states that the County will comply 
with allocation guidelines for the State Relief Funds: and (d) 
states that the County waives its right to claim 
reimbursement for the cost of administering this process. 

1. As noted above, the AB 1661 allocation to be paid by the 
State to counties will be based on: 1) population and 2) the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

30 



10 to Finance and Labor Commit: 
November 17. 1999 Finance and Labor Committee Me 



amount oflocal Property Taxes transferred by the count \ 
school districts for FY 1998-99 under the ERAF. Ms. Carey 
reports that, in FY 1999-2000, San Francisco will receive 
SI, 755, 382 based on its population and at least that amount 
from the ERAF allocations, for a total of at least S3, 510, 764. 
The ERA.F allocations will be determined once the State has 
received certified ordinances or resolutions from counties by 
December 1, 1999, according to Ms. Carey. 

2. On October 20, 1999, the Board of Supervisors approved a 
supplemental appropriation (File 99-1880) in the amount of 
$3,101,242 in AB 1661 State Relief Funds payable by the 
State to San Francisco. The funds were approved in order to 
offset a shortfall in the FY 1999-2000 DPH budget as a result 
of the State's reduced allocation of Tobacco Tax Fund 
revenues to San Francisco under the California Healthcare 
for Indigents Program (CHIP). Ms. Carey reports that any 
remaining funds received under AB 1661. which as of the 
writing of this report is estimated to total at least $409,522 
($3,510,764 minus $3,101,242). would accrue to the City's 
General Fund for FY' 1999-2000. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Item 5 - File 99-2019 

Department: Police Department 

Airport 

Item: The proposed ordinance would authorize an amendment to a 

Memorandum of Understanding (MOU) previously approved by 
the Board of Supervisors (Amendment Number 4) between the 
San Francisco Police Officers Association (POA) and the City 
and County of San Francisco. The MOU was previously 
approved for the five-year period from July 1, 1996 through 
June 30, 2001. The proposed amendment would increase 
Canine Bomb Detection premium pay by $30 biweekly, from $75 
to $105, or an increase of 40 percent, retroactive to July 24, 
1999, for nine Police Officers and one Sergeant assigned to the 
Bureau of Airport Police who are responsible for Airport 
canine/bomb detection matters. 

Description: According to Captain Jim Lynch of the Airport, the Airport 

Police were merged with the San Francisco Pohce Department 
on January 1, 1997. Captain Lynch advises that the POA 
contended that the canine bomb detection responsibilities 
performed at the Airport involve greater personal risk to the 
Pohce Officers involved and therefore warrant an increase in 
premium pay for such responsibilities over the $75 biweekly 
premium pay for canine duties presently paid to Police Officers 
who do not work at the Airport. After mediation between the 
POA and the City before a mediator, Mr. Barry Winograd, 
jointly selected by the POA and the City, the POA and the City 
agreed on the proposed premium pay of $105 biweekly, an 
increase of $30 or 40 percent from the existing premium pay of 
$75 biweekly. 



Comment: 



As shown on the Attachment to this report provided by Ms. Peg 
Stevenson of the Controller's Office, the Controller estimates 
that the costs to the Airport to increase the premium pay for FY 
1999-2000 would be $4,800. Ms. Stevenson reports that 
sufficient funds have already been appropriated in the Airport 
budget. 

According to Mr. Martin Gran of the City Attorney's Office, the 
proposed amendment was mediated, and therefore is not 
binding. Mr. Gran advises, however, that if the proposed 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance and Labor Comm.il 

November IT nance and Labor Comm ting 

amendment is not approved the matter would be submitted to 
binding arbitration. 

Recommendation: Approval of the proposed ordinance is a policy matter for the 

Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Nov- 10- 



:27pm F rain-CCSr CONTROLLER 



7 ±Wfi».Vt\ CITY AND COUNTY OF SAN FRANCISCO 




+415-554-7455 T-433 P. 02/02 =-375 

OFFICE OF THE CONTROLLER 



Edward Harrington 
Controller 



November 10, 1999 



Ms. Gloria L. Young, Clerk of the Board 

Board of Supervisors 

City Hall, Room 244 

1 Dr. Carlton B. Goodlett Place 

San Francisco, C A 94102 

RE: Amendment to Memorandum of Understanding with San Francisco Police Officers 
Association, File 99-2019 

Dear Ms. Young: 

In accordance with Ordinance 92-94, I am submitting a cost analysis of an amendment to the 
Memorandum of Understanding between the City and County of San Francisco and the San Francisco 
Police Officers Association. The amendment covers the period July 22, 1999 through June 30, 2001, and 
affects approximately 210 Police Airport Bureau employees with a salary base of approximately SI 3. 7 
million. Based on our anal ysis, the amendment will result in an incremental cost of approximately 
S4,800 in FY 1999-2000. Sufficient funds for this purpose have already been appropriated in the Airport 
budget. 

If you have any additional questions or concerns please contact Peg Stevenson of my staff at 554-7522. 



Sincerely, 




Edward M. H 
Controller 



Alice Villagomez, ERD 
Harvey Rose, Budget Analyst 



City Hull • I Dr. Carlton B. GooJlctT Place ■ Room 3J6 • S»n Friociwo CA V4102-4&U 



FaX 41S-SS4-7- 



34 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



Item 6 - File 99-2020 

Department: 

Item: 



Human Resources Department (HRD) 

Resolution authorizing the Human Resources Department 
to settle the pay grievance of Service Employees 
International Union, AFL-CIO, Local 790, 535, and 250. 
on behalf of it affected members, filed pursuant to the 
Memoranda of Understanding between the Service 
Employees Union, AFL-CIO, Local 790, 535. and 250, and 
the City and County of San Francisco, in an amount not 
to exceed $360,000. 



Settlement Amount: Not to exceed 5360,000 



Source of Funds: 



Description: 



Comments: 



Fiscal Year 1999-2000 Departmental Budgets for Affected 
Departments 

The proposed resolution would authorize the Human 
Resources Department (HRD) to settle a grievance filed 
by the Service Empkwees International Union (SEIU) 
against the City. Settlement of the grievance would 
authorize the City to pay salary step increases to affected 
permanent employees who (a) were working temporarily 
in a higher classification between May 1, 1995 through 
June 30, 1997, and (b) did not receive the same salary 
step increases provided to employees who permanently 
occupied such higher classifications. 

1. According to Ms. Alice Villagomez of HRD, SEIU filed a 
grievance regarding a Memorandum of Understanding 
(MOU) provision, which provided salary step increases 
between May 1, 1995 through June 30, 1997, to 
temporary City employees. In the grievance, SEIU 
claimed that, based upon their interpretation of the 
subject MOL*. employees who were working temporarily 
in a higher classification, but who held a permanent 
position in a lower classification, should have been paid 
the salary step increase at the same rate as those 
employees who permanently occupied the higher 
classification. Ms. Yillagornez states that the proposed 
grievance settlement would authorize such salary step 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

35 



mo to Finance and Labor Commitl 
November 17. 1999 Finance and Labor Committee Meeting 



increases to the applicable employees 1 . The necessary 
salary step adjustments would be paid for the period 
retroactive from May 1, 1995, through June 30, 1997. 
According to Ms. Villagomez. the settlement agreement is 
justified because, when negotiating the MOU, the parties' 
intent was to provide such salary step increases to all 
employees who were working temporarily in the higher 
classifications. 

2. Attachment I, provided by Ms. Villagomez. further 
explains the SEIU grievance against the City. 

3. Ms. Villagomez reports that 96 employees would 
receive the appropriate salary rate adjustments under the 
proposed settlement, totaling S329. 252.03. The one-time 
cost of S329.252.03 is to be absorbed within the respective 
departmental budgets of the applicable employees. 
Attachment II. provided by HRD, contains the list of the 
affected employees and the amount of the salary- 
adjustments, ranging from a low of $140.80 to a high of 
S14.971.70. Attachment III. provided by HRD. contains 
the basis of the calculations, resulting in one employee 
receiving $14,971.70 in salary step adjustments. 



Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



1 The subject grievance only affects permanent City employees, working temporarily in a higher 
classification, if the pay differential between their temporary and permanent classification were 
greater than 10 percent. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

36 



4 I D D3f -=13 






^ity and County of S2n Francisco 




r.is:/Bi 



Attachment I 



Department of Human Resources 



ANORHA R. GOUR~HK= 
HUKAN R£SOURCcS DIR=~ OS 



MEMORANDUM 
TO: Harvey Rose, Budget Analyst 

FROM: Alice Villagomez, Deputy Director, ERD 

Department of Human Resources 

DATE: November. 9, 1999 

R-H: ' Summary of Provisional Steo Grievance Settlement with SEIU 

.- File No. 99-2020 

In 1996 a dispute arose as to application of a provision of the 1994-1997 MOU, regarding steo 
increases for full-time .provisional employees with permanent status in another classification. A 
tentative settlement was reached in June of 1996; however, the settlement was not finalized fay 
the Union. Tne terms of the settlement were incorporated into the current MOU: all provisional 
employees with permanent status in another classification are entitled to step increases. Tne City 
agreed to identify the universe of emoioyees eligible for retroactive pay - those with permanent 
status in one classification who accented provisional appointments in another classification 
oetween May 1, 1995 and June 30, 1997 - and to calculate the amounts owed for each employee. 
Due to the difficulty in collecting and verifying this historical data, the process was protracted 
and only recently completed. 

The set/dement applies only to employees who are entitled to receive retroactive pay, consistent 
with the intent and explicit language of the current memorandum of understanding. This in turn 
will promote consistent and uniform application of pay provisions. 

The settlement amount 'will not exceed S360,000. Ninety-six (96) employees will receive 
retroactive pay, ranging in amounts from S 14 1.00 to SI 4,972. Tne funds will come out of each 
department's budget. This settlement is intended as a one-time expenditure; however, some 
leeway will be granted to! allow individ ual grievants to challenge department calculations, and to 
allow potential unnamed grievants to come forward with a claim within a specified time period. 



■:\SHAP3£RD\Gnevances\SEIUV^-StepSbnrt©uageLMemo.SnrT^Summary.ooc 



*4 Gough Stnm: • San rr»nci»co. CA 94103-1233 

37 



** TOTAL PAGE. 001 ** 



Attachrr.er. - II 
?aze 1 of 2 



De?t. Last Name 


First 


MI 


Amount 


05 Porcfaia 


Lawrence 




(\4fJ\ J0^> 


08 WashingTon, Jr. 


William 




295.00 


27 Wilson 


Sizes'/ 


A 


31830 


32 Lamont-Stevens 


Bonnie 


p 


7,615.42 


33 Erfe 


Edna 


J 


1,921.90 


35 Ko 


Teresa 


L 


1 ,390.50 


39 Bauer 


Jeffrey 


j. 


3,778.00 


39 Onyernern 


George 


U 


621530 


4 '. Brooks-3ur:on 


Linda 


TT 


3395.80 


41 Chan 


Vrvian 


C 


230150 


4 1 Chang 


Rosalind 


A 


3,441.17 


41 Chee 


Lorna 


C 


3,44154 


41 Delgaciillo-Romo 


Isabel 


3 


3 444 29 


41 Hall 


Mark 


s 


3,455.15 


41 Haskell 


Gardner 


r. 


•5,41830 


4 1 Hudson 


Mary 


J 


3,427.11 


41 ' Lawhun 


Kalhryn 


s 


3256.6 i 


41 ' Lent 


Laura 


J 


3,461.91 


4 ". Tavis 


Tnomas 


_ 


23984$ 


4 1 Van Buskirk 


James 


E 


761.67 


41 VanderBorght 


Barbara 


A 


117915 


4 1 Wampole 


Eileen 


:■: 


3,44435 


41 Airoyo 


Lorena 




4,908.97 


41 Chang 


Leona 


:•: 


5,493.:: 


41 Hui 


Tnomas 


T 


5391.00 


41 Kha 


Kao 




83115 


41 Kilzer-Hill 


Doriene 




8,17339 


41 Ordz 


Jcannene 




6761.17 


4 '. Wedglev 


Judy 


■_ 


3368.99 


41 Xu 


Ping 


? 


9,02031 


41 Jones 


Ackermar. 




11,46029 


41 MacFarland 


Davie 


G 


3,01710 


41 Na 


.Anme 


I 


".32.83 


41 Fowle: 


Tnomas 


s 


5159.80 


4 1 Horn 


Susan 


K 


1856.35 


4 1 Ronquiilo 


Avdina 


s 


132216 


41 She-oc-?;cres 


Michael 




72612 


42 Tolrsr: 


Orlando 


J 


408.76 


42 Lew 


Parkman 




16518^ 


42 "vv'oo 


Linda 




33073" 


42 Cassinelli 


Frank 


D 


1266.15 



38 



■ •■ Attachment 1 1 
?aee 2 of 3 



Deft. Last Name 



First 



MI 



Amount 



42 Jimenez 


Oscar 


R 


3,264.90 


42 Lee 


Sandra 




2,866.03 


42 Threat 


James 




3,51193 


44 Anyiam 


Fmrnann?.! 





136.90 


44 Cerezo 


Imelda 


D 


4,168.60 


44 Resendez 


Eric 


T 


4,168.60 


44 Tham 


Shirley 


S 


1,65100 


45 Kennedy, Jr. 


Francis 


A 


1729.80 


45 Castillo 


Ann 


M 


83834 


45 Stafford 


Michael 




3,195.70 


45 Drago 


John 


D 


603.00 


45 Koberg 


Eric 


G 


1854.99 


45 Joseffer 


Michael 




418.00 


45 Verbrugghe 


Rosaline 


E 


906.60 


45 Earragan 


Jesus 




3,551.00 


45 Barrett 


Peter 


K 


5,539.90 


45 Bums 


Tracy 


J 


3,798.12 


45 Clements 


Eugene 


E 


454.40 


45 Crudo 


Elizabeth 


A 


502.58 


45 Isom 


Sophia 


G 


230.00 


45 Rybka 


Hester 


M 


230.00 


45 Yates 


Renee 


G 


768.40 


45 Esbaugh 


Jan 


E 


6,065.60 


45 Hang 


Lily 




15333 


45 Dahlin, Jr. 


Peter 


M 


4,575.10 


45 Chow 


Rose 




1,195.50 


47 Vaquera 


Hope 




4,24199 


81 Alano 


Teresita 


L 


1,986.10 


81 Davenport 


Angela 




1,892.02 


8 1 Enerio 


Flordeiiza 




133635 


81 Lew 


Lily 


J 


cS£^ 


83 rong 


Linda 


M 


7,46162 


S3 Vasquez 


Angela 




1,826.93 


83 Sias 


Van 




3,926.54 


83 Griffin 


Tonya 


T 


3,035.35 


S3 Castaneda 


Diana Gal 


vez 


1658.20 


£3 Ganido 


Lorna 




13133 


83 Ko 


Lai 


Y 


1,818.95 


85 Miller 


Clay 




2,46221 


86 Perez 


Maria 




3,734.97 


86 Dreaper 


George 


K 


5,699.53 


86 Fazackerley 


James 


M 


8,7213 



39 



Deft. Last Name First MI amount 



86 


Credo 


Weaifredo 




352.92 


86 


Ramos 


Fredy 




7.245.00 


S7 


Eat 


Sam 


A 


12.540.52 


S7 


Kwee 


Salome 


S 


9,146.70 


87 


Mariscal-Rocha 


Micaeia 




9,147.00 


87 


Fernandez 


Gertrude 


R 


528.36 


87 


Fiores 


Carmen 


M 


537.23 


S7 


Griffin 


Joyce 


N 


1,230.76 


90 


Torres 


Lourdes 


D 


201.60 


90 


Moore 


Grace 


L 


l,599.i 7 


90 


Castellanos 


Ivo 


N 


-87.^0 


90 


Yuan 


Sally 


N 


395.90 


90 


Mistier 


Ralph 


N 


3,797.80 



TOTAL $329,252.03 



Attacr.~er.t: II 
?a2e 3 of 3 



40 



J 1 B 



49 13 TO BUD 6c l HNHLYST 

Attachment III 



pty and County of San Francisco fifiSC^<i\ Department of Human Resources 





ANOREA R_ GOURDIKs 
HUMAN RESOURCES DIRECTOR 

MEMORANDUM 

TO: Harvey Rpse, 3udget Analyst 

FROM: Alice Villagomez, Deputy Director. ERD 

Department of Human Resources 

DATE: November 10, 1999 

RE: • Calculation of Retroactive Pay for SEIU Provisional Step Settlement 

' File No. 99-2020 

Ninety-six (96) employees will receive retroactive pay, ranging in amounts from SI 41. 00 to 
514,972. Several factors affected the calculation and account for the broad range in retroactive 
pay amounts. These actors included: 

• Salary schedule 

• Salary step of employee in provisional class 

• Number of hours worked 

• .Amount of lime the situation continued 

• Change in appointment status 

Thus for example, an employee who was at Step 4 in a provisional classification in May of 1995 
and reached Step 5 the next year would only receive retroactive pay for a short amount of time. 
Or an employee who returned to the prior permanent classification within a few months of May 
of 1995 similarly would i receive a smaller amount of retroactive pay. Conversely, a handful of 
employees who were at or near Step 1 in a provisional classification in May of 1995 and did not 
have their anniversary darte corrected until recently are owed significantly larger sums. 



G:\SHARE\ERDvGrrevances\S^ILr^ovS4BpSninnt\Bua^t.MerTwStCTLSum.Tiar)'.Supp.Qoc 






Memo to Finance and Labor Committee 
November 17, 1999 Finance Committee Meeting 



Item 7 - File 99-2072 

Department: 

Item: 



Settlement Amount: 
Source of Funds: 

Description: 



Comments: 



Human Resources Department (HRD) 

Resolution authorizing settlement of the compensatory 
time-off/shift differential grievance of Service Employees 
International Union, AFL-CIO, Local 790, on behalf of its 
affected members, filed pursuant to the Memorandum of 
Understanding between the Service Employees 
International Union, AFL-CIO, Local 790, Staff and Per 
Diem Nurses, and the City and County of San Francisco, 
in an amount not to exceed $125,000. 

Not to exceeds 125, 000 

Fiscal Year 1999-2000 Department of Public Health 
Budget 

The proposed resolution would authorize the Human 
Resources Department (HRD) to settle a grievance filed 
by the Service Employees International Union (SEIU), 
Local 790, against the City. The proposed settlement 
agreement would affect staff and per diem Nurses who (a) 
worked overtime hours from 3:00 p.m. until 7:00 a.m.. and 
(b) who elected to receive compensatory time-off rather 
than to be paid in cash for the overtime hours worked. 
These Nurses had been paid for their compensator}- time- 
off at their base wage rate, without receiving night shift 
differential pay. Under the proposed settlement, such 
Nurses would be paid the applicable night shift 
differential. Settlement of the grievance would authorize 
the City to pay the night shift differential to 413 
applicable Nurses, retroactive from October 7. 1995. 
through August 21. 1998. in an amount not to exceed 
S125,000. 

1. According to Ms. Alice Yillagomez of HRD, under the 
proposed settlement, the City would pay the night shift 
differential, retroactive from October 7, 1995, through 
August 21. 199S. to 413 Nurses who worked overtime 
hours between 3:00 p.m. and 7:00 a.m. and who elected to 
take compensatory time-off rather than be paid in cash 
for overtime. Ms. Villagomez states that the settlement 
agreement is justified because such Nurses would have 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

42 



Memo to Finance and Labor Committee 
November IT. 1999 Finance Committee Meeting 

received the- night shift differential pay. in addition to 
their hourly base rate, if they had elected to be paid cash 
for their overtime, instead of taking compensatory time- 
off. 

2 As shown in Attachment I. provided by HRD, the I 
cost to pay the applicable 413 Nurses is S110.458.89. 
Attachment I contains a list of the affected Nurses and 
the amount of the night shift differential pay for each 
Nurse, ranging from a low of $1.45 to a high of $3,324.63. 
Attachment II. provided by Ms. Villagomez, contains the 
basis of the calculations, resulting in one Nurse receiving 
S3, 324.63 in night shift differential pay, and a further 
explanation of the SEIU grievance against the City. 

3. According to Ms. Villagomez, SEIU Local 790 filed the 
subject grievance on behalf of the Nurses, pursuant to the 
Staff and Per Diem Nurses' MOU with the City. 
Therefore, the resolution should be amended to delete 
reference to SEIU Locals 535 and 250. 

Recommendations: 1. Amend the proposed resolution to delete reference to 
SEIU Locals 535 and 250, as noted in Comment 3 above. 

-. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

A3 



Attachment I 
Page 1 of 9 



NAME 

Abad, Librada 

Abarca, Alfredo 

Acob, Aureiia 

Acob, Faina 

Agcaoiii, Estela 

Alameda, Loretta 

Aldon, Aurea 

Alfonzo, Raquel 

Allen, Oscar 

Allen, Renee 

Allison, Janet 

Alvarez, Celsa 

Amat, Ligaya 

Amodo, Maribel 

Ancheta, Pastora 

Ancheta, Rosalinda 

Andes, Evelyn 

Angeles, Esperanza 

Aragon, Ruby 

Arrajj, Michael 

Arsenault, Mary 

Ascano, Fatima 

Avery, Paula 

Ayco, Soledad 
Babb, Eileen 
Babiera, Thelma 
Bacci, Patty 
Baker, David 
Balmes, Lenneth 
Barall, Valerie 
Bautista, Editha 
Bautista, Emelita 
Bendebel, Asuncion 
Bennett, Myrna 
Bergeron, Charles 
Beshue, Giday 
Bianco, Hijasmin 
Billote, Sophia 
Bitanga, Norma 
Bolt, Christopher 
Boone, Hugh 
Bosch, Lilia 
Boychuk, Therese 
Boyle, Karen 
Britting, Marie 
Brock, Michael 
Brotarlo, Dennis 
Brunig, Regina 



AMOUNT 


PERIOD 


105.25 


10/07/95-08/21/98 


55.62 




726.7 




17.55 


10/07/95-08-21/98 


659.53 




175.34 


10/07/95-08/21/98 


116.35 




98.63 


10/07/95-08/21/98 


215.7 




46.33 


10/07/95-03/21/98 


125.58 




325.05 


10/07/95-08/21/98 


11.58 


10/07/95-08/21/93 


724.65 


10/07/95-07/24/98 


250.7 




1125.33 




671.63 




720.09 




129.89 




11.58 




3.47 




141.37 


10/07/95-07/24/98 


491.4 


10/07/95-07/24/98 


70.35 




133.2 




982.76 




1057.52 


10/07/95-07/24/98 


884.91 


10/07/95-07/24/98 


72.27 




491.01 


10/07/95-07/24/98 


115.18 




680.58 




645.05 




57.92 




553.54 


10/07/95-07/24/98 


327.97 


10/07/95-07/24/98 


20.55 


10/07/95-08/21/98 


105.87 




135.46 




91.39 


10/07/95-07/24/98 


11.58 




107.42 




2197.51 


10/07/95-07/24/98 


49.81 




104.25 


10/07/95-08/21/98 


8.69 


10/07/95-08/07/98 


392.3 


1 0/07/95 - 07/24/98 


275.81 





44 



Attachment I 
Paee 2 of 9 



Bueno, Oscar 

Bumanglag. Melanie 

Buriord, Leonard 

Burns, Majella 

Bush, Judy 

Bustcs, Fidelita 

Butts, John 

Byrne, Joseph 

Cabrera, Josephine 

Carr, Patncia 

Carrillo, Hector 

Carson, Andra Loy 

Castaneda, Renita 

Castillo, Maricel 

Chavez, Maria 

Ch;a, Nancy 

Chiu, Howard 

Clark, Wilia 

Clatworthy, Alycia 

Collins, Jaquelynn 

Connolly, Mary 

Cosmiano, Teresita 

Cramer, Nancy 

Cruz, Daisy 

Cu, Preciousa 
Cuaresma, Armando 
Cunningham, Fran 
Curameng, Sonia 
Daly, Michael 
Daniels, Heral Al. 
Davenport, Christine 
De Jesus, Mana 
De Peralta, Archelita 
Defiiippis, Bernadette 
Del Campo, Eva 
Delamerced, Maria 
Delatorre, Ceciiia 
Delcarlo, Christine 
Denmark, David 
Dentoni, Teresa 
Depakakibo, Isidora 
Devera, Letic;a 
Devera, May M. 
Diaz, Floribel 
Dicks-Chaprack, Laune 
Dickson, Juanita 
Dignadice, Nenette 
Dirlam-Ching, E'nse 
Dizon. Justina 



i 37 
87.12 

5724 
22.83 
48.55 
199.24 
81.08 
26.45 
454.18 
232.24 
11.58 
2.81 
34.75 
27.99 
67.06 
4.34 
35.62 
143.23 
47 C3 
3921 
74.09 
695.39 
175.47 
116.95 
721.36 
10262 
104.59 
152.85 
23.17 
43.78 
65.77 
77.74 
335.38 
703.73 
23.17 
54525 
1334 
455.77 
34.75 
416.99 

81.07 
557.35 
1014 
35.09 
30045 
672.35 
325.47 
545.01 



10/07/95-08/21/98 
10/07/95-08/07/98 
10/07/95-07/24/98 



10/07/95-07/24/98 



10/07/95-07/24/98 
10/07/95-07/24/98 



10/07/95-08/21/98 



10/07/95-08/07/98 
10/07/95-08/07/98 
10/07/95 - 08/21/98 
10/07/95-08/21/98 

10/07/95-07/24/98 



10/07/95-07/24/98 

95 - 07/24/98 
10/07/95-08/21/98 
10/07/95-08/21/98 

10/07/95-08/21/98 



10/07/95-07/24/98 
10/07/95-07/24/98 



45 



Attachment I 
Page 3 of 9 



Dobbas, Marilyn 
Doiar, Marina 
Domingo, Demetria 
Doremus, Gunilla 
Duguay, Micheie 
Dunieavy, Noreen 
Dunne, Mary 
Dusich, Joanna 
Dy (Gaetos), Dahlia 
Efross, Monnie 
Ellenberg, Teni 
Escribano, Christina 
Esmero, Mary 
Espii, Annette 
Estoniana, Feiisa 
Evangelista, Cecilio 
Evangelista, Elsa 
Evans, Liiia 
Feldman, Karen 
Fernandez, Lisa 
Fernando, Virginia 
Fiame, Connie 
Flanagan, Kathleen 
Fleming, David 
Flores, Mariano 
Fong, Jane May 
Foronda, Lily 
Fortaleza, Grace 
Foster, Stephen 
French, Victor 
Frias, Josephine 
Friedman, Adam 
Frith, Yvette 
Fung, Berna 
Gacula, Linda 
Gacula, Perlita 
Gallagher, Carme! 
Galvan, Czellane 
Garcia, Victoria 
Garvey, Boonie 
Geventhor, Marley 
Godwin, Mukulla 
Goldberg, Joan 
Goldberg, Judith 
Goltiao, Daisy 
Green, Grad 
Greenblat, Carla 
Gnppo, Joan 
Groulx, Michel A. 



152.51 
145.59 
11.53 
175 
1148.45 
58.25 
575.48 
249 
580.39 
95.4 
154.24 
855.17 
725.35 
541.24 
116.59 
499.1 
202.11 
11.58 
52.99 
81.03 
17.53 
160.65 
283.2 
115.4 
111.17 
72.48 
123.01 
287.47 
680.9 
505.83 
101.35 
54.5 
232.72 
105.09 
70.19 
719.65 
87.87 
407.7 
249.38 
75.29 
40.52 
1 1 .57 
22.01 
133.55 
15.7 
55.83 
46.35 
290.98 



10/07/95-08/21/98 

10/07/95-08/21/98 

10/07/95 -07/24/S8 
10/07/95-08/21/98 
10/07/95-07/24/98 



10/07/95-07/24/93 
10/07/95-08/07/98 
10/07/95-08/21/98 

10/07/95-08/21/93 



10/07/95-03/07/98 
10/07/95-08/21/98 
10/07/95-07/24/98 

10/07/95-08/21/98 



10/07/95-07/24/98 
10/07/95-08/21/98 
10/07/95-07/24/98 
10/07/95-07/24/98 



10/07/95-08/21/98 
10/07/95-8/21/98 



10/07/95-08/21/98 
10/07/95-08/21/98 



10/07/95-07/24/98 
10/07/95-0821/98 



46 



Attachment I 
Page A 



Guess, Maria 
Guinto, Rebecca 
Hahn-Gothelli, Sylvia 
Hall, Thomas 
Hall, Thomas 
Hardi, Rachelle 
Harmon, Susan 
Hayes, Aaron 
Hayo, Santiago 
Heauser, Judy 
Hellshom-Q, Elaine 
Hernandez, Bernardjta 
Hernandez, Geraldine 
Herrera. Celerina 
Hikima, Maria 
Hill, Shirlee 
Hixon, Donald 
Hjelm, Laune 
Hofer-Deiter, Linda 
Hool, Sherman 
Horan, Jean 
Hortinela, Fe 
Hsu, Yuan Shek 
Huang, Yu-Chin 
Hugo-Portem, Victoria 
Hurtado, Osmundo 
Huypungco, Blesilda 
Ignacio, Rowena 
Ivory, Robert 
Jabonero, Mary G 
Jacala, Rey 
Jalbuena, Lourdes 
Jensen, Lauris 
Jones, Diane 
Jones, Lorian 
Jones, Samuel 
Junco, Teresa 
Karlsrud, Elizabeth 
Keith, Charles 
Kelleher, Joan 
Kennedy, Kathleen 
Kennedy, Sharon 
Kerman, Adrienne 
Keys, Gussie 
Kho, Felisa 
Kikuno. Akiko 
Kildaff, Valerie 
Kirchner, Suzanne 
Knoblock, Beaonia 



75.95 




45.5 




120.12 




107.2 


10/07/95-08/07/98 


22.49 


10/07/95 -08/C" 


34.42 




97.91 




342.17 


10/07/95 - 07/24/98 


337.29 


10/07/95-07/24/98 


52.35 




369.95 


10/07/95-08/21/98 


309.55 


10/07/95-08/21/98 


98.33 




37.65 




357.09 


10/07/95-07/24/98 


140.38 


10/07/95-07/24/98 


69.5 




17.9 




10355 


10/07/95 - 07/24/98 


108.64 


' 10/07/95-07/24/98 


4095 
/JS3^4~6T> 




176.2 


10/07/95-08/21/98 


58.26 




104.59 




571.85 


10/07/95-07/24/98 


1286.15 


10/07/95 - 05/07/98 


8.69 


10/07/95-08/07/98 


102.99 




5.79 




558.65 


10/07/95 -C 


73 99 




23.17 


10/07/95-08/21/98 


20.83 




71.47 




532.73 




616.55 




33.75 




37.53 




1083.02 




101.7 


38/21/96 


238.8S 


10/G" 


806.51 


10/07/95-08/07/98 


69.75 


10/07/95- : 


45.33 


10/07/95-08.21/98 


945.62 


10/07/95-08/21/98 


20.27 




581.05 


10/07/95-07/24/98 


1097.48 





47 



Attachment I 
Page 5 of 9 



Koepke, Peggy 

Kopp, Linda 

Koretsky, Zhanna 

Kreiiing, Steven 

Kubota, Linca 

Kutys, David 

Lacy, Jean 

Lai, Diana 

Lam, Chee 

Lane, Roberta 

Langle, Kevin 

Langmade, Cynthia 

Lasant, Nina 

Latko, Frank 

Lawhern, Toni 

Leach, Phyllis 

Lear, Carol J. 

Lee, Sophia 
Lennon, Caroline 
Lewis, Paul 
Lewis, Rose 
Livni, Rivka 
Lizardo, Judy 
Llanos, Ramoncito 
Lopez, Lucy 
Lope::, Ma Gracia 
Lozano, Lucy 
Ludovico, Mrietta 
Lynch, Mary 
Madamba, Jocelyn 
Maldonado, Maria 
Mallari, Elwyn Q. 
Manansala, Dolores 
Mandapat, Besilda M. 
Mandapat, Lourdes S. 
Mangact, Myrna 
Maranan, Julie 
Marania, Esther V. 
Marasigan, Elsa 
Margate, Vicenta V. 
Maron, Michael 
Marsco, Lawrence 
Marshall, Alice 
Martin, Ruby 
Martinez, Alise 
Matilla, Milagros 
Maurer, Rita 
Mayo, Wildora 
McCabe, Ann 



23.15 
28.38 
63 
312.74 
171.52 
81.1 
316.44 
1472.95 
172.55 
674.31 
45.63 
114.87 
21.8 
4S4.79 
80.12 
144.S2 
16.77 
321.42 
17.72 
47.72 
21.43 
195.91 
11.58 
488.64 
11.93 
104.25 
61.23 
489.47 
801.64 
304.28 
1369.35 
139 
818.94 
197.25 
24324 
57.92 
772.79 
17.37 
727.33 
52.55 
178.09 
146.08 
452.28 
722.37 
954.45 
451.29 
243.74 
59.57 
793.85 



10/07/95-07/24/98 
10/07/95-07/24/98 
10/07/95-08/07/98 

10/07/95-08/07/98 
10/07/95-08/07/98 

10/07/95-08/07/98 

10/07/95-08/21/98 
10/07/95-07/24/98 
10/07/95-08/21/98 
10/07/95-08/21/98 

10/07/95-08/21/98 

10/07/95-08/21/98 
10/07/95-07/24/98 

10/07/95-08/21/98 

10/07/95-08/07/98 
10/07/95-07/24/98 

10/07/95-08/21/98 

10/07/95-08/07/98 



AS 



Attachrr.er. •- i 
Page 6 of 9 



McCarrell, Donald 
McCarthy, Maureen 
McClurg, Josephine 
McCoy, Isabel 
Mclnerney, Margaret 
McMullen, Louis 
McMullen, Marilyn 
McRae, Michael 
Medina, Roberto 
Melgarejo, Marilyn 
Mende, Christine 
Merer, Daniel 
Mesina, Consuelo 
Mezger, Susan 
Milano, Edel 
Miller, Lettie 
Miller, Taska 
Miranda, Marilyn 
Miranda, Sandra 
Mogan, Evan 
Moissant, Helen 
Montesino, Josefina 
Morris, Joanne 

Motos, Lisa 

Moy, Susan 

Mungia, Linda 

Najar, Gloria 

Nash, Philip 

Nassar, Janet A. 

Navor, Lucrecia 

Needle, Patncia R. 

Nethrcott, Ema 

Newhard-Parks. Jane 

Nguyen, Huong 

Nguyen, Tnerese 

Nichols, Lawrence 

Norman, Gail 

Obina, Eugenio 

O'Brien, Maria 

O'Connor, Kim 

O'Connor, Marilyn 

O'Donnell, Shiriey 

Offnill-Whitelaw. Aiice 

Okobi. Maureen 

O'Neill, Daniel 

Orbino, Mansa 

OToole, Ellyn 

Otto, Tim 

Padua, Magdalena 



741 42 
414 55 
337.28 
152.2 
55.55 
7243 
23.95 
133 11 
10.58 
10.58 
135.49 
49.69 
8.69 
23.17 
60.81 
79.59 
26 
320.67 
1290.3 
72.18 
121.76 
83.98 
79.12 
122.72 
28.11 
151.27 
878.55 
363.4 
32.84 
5622 
11.73 
655.79 
78.42 
57.92 
2027 
23.17 
543.92 
81.08 
58.95 
45.5 
139.49 
1157.11 
3422 
151.44 
134.95 
544 

282.99 
559 
74.1 



10/07/95-07 . 
10/07/95-08/07/98 

10/07/95-0: 
10/07/95 -G7 

10/07/95-08/21/98 



10/07/95-08/07/98 
10/07/95-07/24/98 



10/07/95-07/24/98 



10/07/95-08/21/98 
10/07/95-08/21/98 
10/07/95-08/21/98 
10/07/95-08/07/98 



10/07/95-0821/98 

10/07/95-08/07/98 

10/07/95 -0a21/98 

10/07/95-08/07/98 
10/07/95-07/24/98 

10/07/95-0724/98 



10/07/95-03/07/98 
10/07/95-0821/98 



49 



Attachment 
Page 7 of 



Pajarillo, Teresita 
Palaad, Rodrigo 
Panganisan, Corazon 
Pelkin, Christine 
Penhiter, Judith 
Penn, Sharon 
Perez, Asteria 
Perrin, Terry 
Perry, Colleen 
Perz, Seeranee 
Planas, Daisy 
Pleites, Ninfa 
Poblete, Carmeiita - 
Poblete, Teresita 
Pongol, Cleotilde 
Powers, Glenn 
Puentes, Zenaida 
Quano, Eva 
Quemere, Regina 
Quiazon, Violeta 
Quitoro, Nida D. 
Ramos, Jocelyn 
Recidoro, Priscilla 
Reinosa, Emilda 
Revese, Emelita 
Reyes, Gliceria 
Reyes, Marilou 
Reyes, Teresita 
Rice, Martinez 
Richards, Erin 
Richey, Eileen 
Robertson, Jeanne 
Ross-Manashil, Kelly 
Ruf, Sally 
Runas, Rosalina 
Sanchez, Maria 
Santa Maria, Edmundo 
SantiJIan, Cristina 
Sarzaba, Merceditas 
Savage, Jacqueline 
Sayre, Terry 
Schulteis, Diane 
Scott, Marriales 
Scott, Regina 
Scruggs, Cynthia 
Sheldon-Weber G. 
Shokmaili, Korie 
Shreve, Carmalita 
Sims, Harald 



781.C5 


10/07/95- 


08/21/98 


951.33 


1 0/07/95 - 


08/07/98 


1 327.47 


10/07/95- 


08/21/98 


125.5 


10/07/95- 


07/24/98 


401. S3 


10/07/95- 


07/24/98 


748.5 






34.74 






43.59 


10/07/95- 


08/07/98 


545.09 


10/07/95- 


07/24/98 


80.33 






570.47 


10/07/95- 


08/21/98 


11.53 






257.8 






521.58 






118.25 






55.95 


10/07/95- 


07/24/98 


153.54 






850.6 






37.55 






17.37 






2.98 






865.11 






81.08 






230.75 






46.57 






344.88 






1537.15 


10/07/95 


- 08/21/98 


34.74 






23.83 






22.78 






26.91 






82.51 


10/07/95 


- 08/07/98 


23.23 


10/07/95 


- 08/07/98 


249.99 






45.33 






749.95 






47.02 


10/07/95 


- 07/24/96 


805.25 


10/07/95 


- 08/21/98 


328.37 






650.71 


1 0/07/95 


- 07/24/98 


2.98 






8.69 


10/07/95 


- 08/07/98 


92.27 


10/07/95 


- 08/07/98 


130.07 


10/07/95 


- 07/24/98 


11.58 






11.58 






12.65 






66.07 






11.58 


10/07/95 


- 07/24/98 



50 



Attachment I 
Page 8 of 9 



Sinporn, Sirintnjndor 
Sison, Debbie 
Sison, Socrates 
Slowly, Stewart 
Smith, Jean 
Smith, John R. 
Smith, Valorie 
So, George 
Sobal-Herrera, Silva 
Soffian, Margaret 
Sorensen, Lara 
Soriano, Perlita 
Spray, Terry R. 
Spry, Maria Teresa 
Stangby, Ann 
Steiger, Shenette 
Steinlauf, Ann 
Stone, Scott 
Sue, Kyung 
Sung, Pamela 
Suto, Carol 
Sypher, Robert 
Talley, Elsie Rae 
Taylor, Barbara 
Taylor, Mary 

Taylor-Hernandez, Patricia 
Taylor-Woodbury, Jean 
Teng, Beng 
Tesorero, Yolanda 
Thekkek, Prema 
Thiebaud, Lorraine 
Thompson, Lillian 
Thompson, Ofeiia 
Ting, Danilo 
Torre, Lisa 
Tuazon, Blandina 
Tucker, Kimberly 
Turbin, Daniel 
Valiente, Celerina 
Valius, Marilyn 
Venegas, Mildred 
Vergara, Rubi 
Vestal, Concordia 
Vigay, Yvonne 
Villaluz, Liiia 
Viteri, Edith 
Vo, Nguyet P. 
Von Rotz, Susan 
Wang, Yu-Ruo 



8.69 

11 

145. E3 

2.9 

11.76 

64.76 

20.99 

202.12 

7.24 

44.98 

29.72 

272.84 

174.67 

858.95 

73.75 

90.56 

33.36 

8.52 

165.08 

338.12 

11.58 

91.65 

34.75 

1190^ 

1202.87 

223.58 

452.89 

58.61 

373.83 

879.07 

2.98 

707.7 

23.17 

52.47 

73.95 

103.52 

323.7 

253.21 

17.37 

903 48 

717.3 

153.44 

25.85 

287.9 

43.54 

10.25 

5.S7 

193.68 



10/07/95-08/21/98 



10/07/95-07/24/98 

10/07/95-08/21/98 
10/07/95-07/24/98 
10/07/95-08/21/98 



10/07/95-08/07/98 



10/07/95-07/24/98 
10/07/95-07/24/98 



10/07/95-08/21/98 



10/07/95-07/24/98 
10/07/95-07/24/98 



10/07/95-07/24/98 

10/07/95-07/24/98 

10/07/95-08/21/98 

10/07/95-07/24/98 
10/07/95-07/24/98 
10/07/95-07/24/98 
10/07/95-08/21/98 

10/07/95-07/24/98 



10/07/95-08/21/98 



10/07/95-08/07/98 



51 



Attacnment l 
Page 9 of 9 



Wehrmeister, Catherine 
Welsh, Marife 
Wianecki, Deborah 
Wilcox, Christopher 
Williams, Johnnie 
Wong, Elizabeth 
Wong, Janie 
Wong, Phyllis 
Word, Susan 
Worth, Cecilia 
Wu, Chiu 

Yabut-Castro, Maria 
Yanez, Dianna 
Young, Dan-Chan 
Young, III, Thomas 
Yu, Lourdes 
Zamora, Rose Marie 
Zarate, Norma 
Zarazua, Gladys 
Zoller, Noble 

TOTAL 



11.58 






59.63 


10/07/95- 


07/24/98 


115.83 






11.25 






1262.88 


1 0/07/95 - 


07/24/98 


1637.25 






44.88 






197.93 






9.55 






75.29 


10/07/95- 


• 08/07/98 


905.37 






23.16 






32.2 






24.32 






23.42 






141.97 


10/07/95 


- 07/24/98 


152.83 


10/07/95 


- 07/24/98 


69.5 


10/07/95 


- 08/21/98 


103.23 


10/07/95 


- 08/21/98 


29.11 






110,458.89 







52 



Attachment II 



City and County of San Francisco (i?&£+\ Department of Human Resources 




A.NDREA R. GOURDINE 
HUKAN RESOURCES DIRECTOR 




MEMORANDUM 

TO: Harvey Rose, Budgei Analyst 

FROM: Alice Villagomez. Deputy Director, ERD 

Department of Human Resources 

DATE: November 9, 1999 

RE: Grievance Settlement - Staff Nurses SEIU Local 790 

File No. 99-2072 



In 1995, the City determined that the pay provisions of the SEIU Local 790 Nurses 
Contract excluded shift differential pay on any compensatory time off (CTO) when it was 
taken. Pais interpretation of the contract was consistent with the practice of only paying 
premiums on any hours actually worked. 

As the use of CTO is payment at a later date of hours actually worked on an overtime 
basis (as opposed to sick pay, vacation, and holiday pa) which are payment for non hours 
worked) the shift premium pay should be included for hours taken off that otherwise 
would have been included at the overtime rate. 

The shift differential calculations were determined by: the individual's classification and 
salary step and current shift schedule when the CTO is taken. The settlement amount will 
not exceed SI 25.000. A total of 400 employees are affected, for amounts ranging from 
S 1 .45 to S3.324.63. The funds will come out of the Health Department's budget This 
settlement is intended as a one-time expenditure; however, because the re-construction of 
the pay calculations was so difficult, some leeway will be granted to allow individual 
gnevants to submit further documentation. 



• • * DTAL page . " 
53 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 

Item 6 - File 99-2026 



Department: 



Real Estate Department 
Department of Public Works 



Item: 



Resolution approving and authorizing a Purchase 
Agreement between the City and County of San 
Francisco, as buyer, and Pacific Gas and Electric 
Company (PG&E), as seller, to purchase real 
property located at 2315 Cesar Chavez Street, 
known as Assessor's Block Number 4343, Lot 1A. 
for a purchase price of $3,841,000; approving an 
agreement by the City to release and indemnify 
PG&E for hazardous materials; approving certain 
environmental deed restrictions; approving the 
assumption by the City of a billboard lease 
affecting the property; approving certain 
limitations on the City's remedies against PG&E 
for breach; adopting findings that the purchase 
agreement is consistent with the City's General 
Plan and eight priority policies of City Planning 
Code Section 101.1: authorizing the Director of 
Property to execute documents, make certain 
modifications and take certain actions; and 
ratifying prior acts. 



Amount: 



S3. 841, 000 purchase price 

81.000 title and closing costs 
$3,922,000 Total 



Source of Funds: 



Description: 



$3,109,978 Real Property Special Revenue Fund 
812.022 Prior Year Overhead Cam-forwards 



$3,922,000 Total 

The proposed resolution would authorize the City, 
through the Real Estate Department, to purchase 
from PG&E, for $3,841,000, 4.09 acres (178.161 
square feet at approximately $21.56 per square 
foot) of property located at 2315 Cesar Chavez 
Street, on the south side of the street, between 
Kansas Street and Evans Avenue. The proposed 
unimproved land parcel to be purchased, currently 
has four City-owned trailers, three billboards and 
various DPW vehicles located on the site. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

54 



Finance and Labor Committee 
November 17. 1999 Finance and Labor Committee Meeting 



Since February 7, 198G. the proposed parcel has 
been leased by the City from PG&E. Currently, 
under a revocable license agreement, the City pays 
PG&E a license fee of S24.422 per month, or 
$293,064 annually. 

Under the existing license agreement, the 
Department of Public Works (DPW) uses the 
proposed site for DPWs Emergency Department 
Operations and Training trailer, parking of over 
100 vehicles for DPWs Bureau of Street and Sewer 
Repair operations and for the storage of materials. 
Ms. DeVaughn notes that the proposed site is 
located adjacent to the City-owned DPW 
Operations Yard property at 2323 Cesar Chavez 
Street. In addition, Ms. Marcia DeVaughn of DPW 
reports that the site currently houses (1) one 
Department of Parking and Traffic trailer for 
administrative operations for the Parking Control 
Officers (PCOs) that accompany DPWs street 
sweepers each day, (2) one Public Utilities 
Commission (PUC) trailer for Sewer Operations 
administration and (3) one DPT trailer that is 
currently used for storage purposes. According to 
Ms. DeVaughn, if the proposed site is purchased, 
the DPW plans to continue to use the property for 
the same purposes. 

On July 28. 1997, the Board of Supervisors 
approved a Master Settlement Agreement between 
the City and PG&E, including a Memorandum of 
Understanding (MOU). which outlined the 
principal terms and conditions under which PG&E 
would sell and the City would purchase the subject 
property (Ordinance No. 304-97. On May 17. 1999, 
the City, through the Real Estate Department, and 
PG&E entered into a subsequent MOU. which 
reiterated the terms and conditions of the previous 
MOU, but extended the time schedules to be able to 
complete the approval of the proposed Purchase 
Agreement to within 180 days of the date of the 
MOU, which now extends through December 7. 
1999. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



In accordance with the proposed resolution and 
PG&E's required terms for the proposed sale of the 
property, the City must release PG&E for 
hazardous materials present on the subject 
property as of the closing date of the proposed sale 
and indemnify and hold PG&E harmless from 
releases of hazardous materials after the closing, if 
such hazardous materials were not present on the 
property as of the closing, or if the City causes 
releases of previously disclosed hazardous 
materials. Mr. Jesse Smith of the City Attorney's 
Office advises that the proposed Purchase 
Agreement is basically an "as is sale" and that the 
City is familiar with the site conditions both based 
on its past use and on hazardous materials testing 
done on the property. However, Mr. Smith advises 
that the proposed agreements contain (1) mutual 
release provisions, for both the City and PG&E, to 
agree not to sue each other with respect to 
hazardous materials; (2) indemnification and hold 
harmless provisions by the City in favor of PG&E 
against third party claims, which are limited to 
certain claims that arise after the closing for 
matters that are within the City's control; and (3) 
limitations on certain remedies to the Citj% such as 
monetary claims for a breach by PG&E and a 
waiver of jury trials. According to both Mr. Smith 
and Ms. Elaine Warren of the City Attorney's 
Office, the proposed provisions are commercially 
reasonable for the City, given the overall provisions 
of the proposed Purchase Agreement, and assuming 
that the proposed purchase price takes into account 
these provisions. 

Mr. Jesse Myres of the Department of Real Estate 
advises that the proposed PG&E site used to be a 
natural gas storage site, and various hazardous 
materials may have been used on the site. 
However, Mr. Smith and Ms. Warren report that 
over sevpral years, there has been environmental 
testing and analysis of the proposed site, which the 
Regional Water Quality Control Board has 
reviewed. Mr. Smith further advises that a letter 
from the Regional Water Quality Control Board 
found that no remediation of the site related to the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

56 



Memo t" Finance and Labor Commit: 

■raber 17, 1999 Finance and Labor Comm: ting 

former natural gas storage facility was necessary, 
so long as the proposed parcel was used for 
industrial or commercial purposes. 

Therefore, as required by PG&E, the Purchase 
Agreement restricts the City's use of the property 
for industrial or commercial purposes. Mr. Myres 
ports that if the City wants to use the property 
for other purposes in the future, the Purchase 
Agreement stipulates that the City would be 
required to apply to the appropriate regulatory 
agency for such use (i.e., Regional Water Quality 
Control Board), and also receive PG&E's consent, 
which cannot be reasonably withheld. Mr. Myres 
advises that the valuation of the property was 
based on the use for only industrial and commercial 
purposes. 

In addition, the Purchase Agreement stipulates 
that the groundwater under the property will not 
be used as a water supply. Mr. Myres advises that 
the site contains serpentine rock, which is natural 
to this area of the City, however, such serpentine 
rock contains natural asbestos. Due to the 
proximity of the Bay and the groundwater on this 
site, coupled with the natural occurring asbestos, 
Mr. Myres reports that the restriction to not use 
the groundwater as a water supply was included, 
as required by PG&E. 

Furthermore, there is also a 30-foot wide easement 
that PG&E would reserve in the deed for overhead 
electric facilities for PG&E, which is located along 
the western border of the property, adjacent to the 
DPWs operations yard (See Comment 6 for 
additional details). 

Under the proposed resolution, the City will 
assume the existing PG&E lease with Outdoor 
Systems. Inc. for the billboards on the subject 
property (See Comment 7 for additional details). 

Comments: 1. Mr. Myres reports that the proposed purchase 

price of S3. 841. 000 and the terms and conditions of 
the proposed acquisition represent the fair market 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance and Labor Committee 

November 17, 1999 Finance and Labor Committee Meeting 



value for this property at the time of the 
Settlement Agreement in 1997. 

2. In addition to the proposed purchase price of 
S3, 841. 000. in accordance with the proposed 
Purchase Agreement, the City will pay land survey 
(S 10,000), closing costs ($2,500), extended coverage 
title insurance ($5,500), environmental inspection 
fees ($8,000) and prorated costs of Property Taxes 
($55,000), resulting in total additional costs of 
$81,000 according to Mr. Myres. 

As part of the existing revocable license agreement 
between PG&E and the City, the City is 
responsible for annually reimbursing $55,000 of 
Property Taxes to PG&E, which PG&E pays to the 
State Board of Equalization. As noted above, these 
Property Taxes would be prorated and paid as part 
of the purchase for the parcel. Once the City 
purchases the subject property, these Property 
Taxes would no longer be paid by the City. 

3. Ms. Tina Olson of DPW reports that $3,109,978 
was included in DPWs FA 7 1999-2000 Capital 
Improvement Project budget (Real Property Special 
Revenue Fund) for the purchase of the proposed 
parcel at 2315 Cesar Chavez Street. Ms. Olson 
reports that such funds were made available 
through the 1998 sale of DPWs surplus property at 
7t h and Channel Streets to Maycor. Inc., the high 
bidder, for $3,867,000. In addition, Ms. Olson 
advises that the balance of $812,022 ($3,922,000 
total purchase and closing costs less $3,109,978 FY 
1999-2000 Capital Budget appropriation) would be 
funded with DPW overhead monies that were 
appropriated in previous years, and carried forward 
for this purpose. 

4. The proposed sale of the property would be 
subject to the California Public Utilities 
Commission (CPUC) approval. In accordance with 
the proposed resolution and Purchase Agreement. 
PG&E is obligated to use diligent efforts to obtain 
the CPUC's approval. Either the City or PG&E can 
terminate the proposed Purchase Agreement if the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Commit 

November 17, 1999 Finance and Labor Committee Meeting 



CPUC does not authorize approval of the proposed 
sale of the property within 23 months from the date 
that the application is submitted to the CPUC for 
approval. Mr. Smith reports that, once the 
Purchase Agreement is signed and the application 
is completed, it is estimated to take approximately 
12 to 18 months to receive the CPUC's approval, 
and that the CPUC is generally required by law to 
act within 18 months. 

5. The proposed resolution would adopt the findings 
that the Purchase Agreement is consistent with the 
City's General Plan and the eight priority policies 
of City Planning Code Section 101.1. On October 
20, 1999, the Director of Planning submitted a 
report which found that the proposed Purchase 
Agreement is consistent with the City's General 
Plan and the eight priority policies of City Planning 
Code Section 101.1. 

6. The proposed Purchase Agreement stipulates a 
30-foot wide easement, where existing PG&E 
electric overhead power lines are located, along the 
western border of the PG&E property, immediately 
adjacent to the DPW operation yard. According to 
Mr. Myres. the deed for the proposed property will 
contain this 30-foot wide easement, which prohibits 
the drilling of any wells or the construction of any 
buildings or reservoirs, but provides for the City's 
use of the surface within the 30-foot wide easement 
area. 

Currently, Ms. DeYaughn reports that DPW's 
emergency operations trailer, which is seismically 
anchored and contains numerous telephone, 
computer and satellite communications, is located 
within the 30-foot wide easement area. However, 
Ms. DeVaughn and Mr. Smith advise that they are 
currently discussing this issue with PG&E to seek 
clarification of the ability to retain the trailers in 
their current location, since these trailers have 
been located on this same site for years, with the 
previous permission of PG&E. According to Ms. 
DeYaughn, the estimated cost to relocate this 
trailer would be S50.000 to $100,000. Ms. Olson 

BOARD OF SUPERVISORS 
BUDGET. ANALYST 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 



reports that, if the trailers need to be relocated, 
such funds would need to be budgeted. 

7. According to Mr. Myres, under a current year-to- 
year agreement between PG&E and Outdoor 
Systems, PG&E presently receives S3. 170 of 
annual revenue from Outdoor Systems for the three 
billboards on the subject property. Ms. DeYaughn 
advises that the billboards do not interfere with 
DPW operations on the site. Mr. M} T res advises 
that, if the City enters into the proposed Purchase 
Agreement, once the existing lease with Outdoor 
Systems expires, it is the City's intention to enter 
into a new agreement with Outdoor Systems at 
market rate rents for the three billboards on the 
property. Mr. Myres estimates that such rental 
revenues should be approximately S5,000 annually 
and reports that such revenues would accrue to the 
City's General Fund. 

8. Although the City, through the DPW, has leased 
the subject property since 1986, a period of over 13 
years, Mr. Smith and Ms. Warren advise that the 
City was not able to purchase the property at an 
earlier date due to years of negotiations between 
the City and PG&E over the price and the 
investigation of potential hazardous materials 
located on the site. As discussed above, on July 28, 
1997, the Board of Supervisors approved a Master 
Settlement Agreement between the City and 
PG&E, which included an MOU outlining the 
parameters for PG&E to sell the City the proposed 
property. As a result, the City now has through 
December 7, 1999, to approve the proposed 
Purchase Agreement, as required by the 
subsequent MOU of May 17, 1999. entered into by 
PG&E and the City, through the Real Estate 
Department. Therefore, Mr. Myres advises that if 
the City does not approve the proposed Purchase 
Agreement, by December 7, 1999, then PG&E does 
not have to sell the proposed site at the previously 
agreed price of $3,841,000. 

9. Based on the current annual rental costs of 
$293,064 and the additional annual Property Taxes 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

60 



QO to Finance and Labor Commit 
November 17, 1999 Finance and Labor Comm. ung 



of $55,000. DPW is currently paying a total of 
S348.064 annually to PG&E to lease the subject 
property. Under the proposed license agreement, as 
of July 1. 2001, the current annual rents will be 
adjusted to current market rates. Given the 
proposed one-time purchase price of $3,841,000 and 
the one-time closing costs of $81,000, the City will 
incur a total one-time cost of $3,922,000 to 
purchase the proposed property. The City, through 
DPW, has been leasing the subject property for the 
past 13 years and reports a continuing need for use 
of the property for DPW's equipment, vehicles and 
storage. Therefore, the Budget Analyst estimates 
that by purchasing the subject property outright 
and not paying future rental and Property Tax 
payments, the City will realize total savings 
equi\ ;he $3,922,000 purchase and cl 

costs of the property within 11 years, and at least 
$350,000 in savings annually thereafter. 

10. Given that (1) DPW continues to have an 
ongoing need for use of the subject property, which 
is located immediately adjacent to the City-owned 
DPW operations yard; (2) the City has leased the 
subject property for the past 13 years at the current 
annual cost of $293,064. plus $55,000 annually for 
Property Taxes, for a total annual cost of S348.064: 
(3) the purchase price of $3,841,000. including 
closing costs of SSI, 000, for total one-time costs of 
S3. 922. 000 and the terms and conditions of the 
proposed acquisition represent the fair market 
value for this property: (4) by purchasing the 
property outright, the City will realize total savings 
equivalent to the $3,922,000 purchase and closing 
costs of the property within 11 years, and at least 
$350,000 in savings annually thereafter: (5) the 
City Attorney has determined that the proposed 
releases, indemnification and limitations are 
commercially reasonable. based on the 
determination by the Real Estate Department that 
the purchase price reflects those terms; and (5) the 
funds have already been appropriated for this 
purpose, the Budget Analyst recommends approval 
of the proposed Purchase Agreement. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

61 



Memo to Finance and Labor Committee 

November 17. 1999 Finance and Labor Committee Meeting 

Recommendation: Approve the proposed resolution. 



Supervisor Yee 
Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakev 




Harvev M. R.ose 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

62 




City and County of $an Francisco 

Meeting Minutes 

Finance and Labor Committee 

Members: Supervisors I. eland Yee, Sue Bierman and Tom Ammiano 
Clerk: Mary Red 



City Hall 

1 Dr. Carlton B 

Goodlett Place 

San Francisco, CA 

94102^1689 



Wednesday, December 01, 1999 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Sue Bierman, Tom Ammiano. 



Meeting Convened 



DOCUMENTS DEPT. 
DEC - 7 1999 



The meeting convened at 10:12 a.m. 



SAN FRANCISCO 
PUBLIC LIBRARY 

991428 [Truth in Disclosure Act) 
Supervisor Yee 

Ordinance amending Planning Code Sections 306.1 and 306.3 to require disclosure in a conditional use or 
variance application and notice for public hearing of the name under which the applicant intends to conduct 
business, and requiring that applications be signed under penalty of perjury; amending Building Code Section 
106.3 to require disclosure in a building permit application of the name under which the applicant intends to 
conduct business, and requiring that applications be signed under penalty of perjury. 

(Amending Planning Code Sections 306.1 and 306.3; amends Building Code Section 106.3.) 

7/19/99, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 8/18/1999. 7/27/99 - Referred to Planning 

Commission and Building Inspection Commission for recommendations and review. 

10/12/99, SUBSTITUTED. Submitted by Supervisor Yee in Board, bearing same title. 

10/12/99, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 1 1/1 1/1999. 10/27/99 - Referred substitute 

legislation to Planning Commission and Building Inspection Commission for recommendations and review. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Paul Rosetter, City Planning Department; 
Supervisor Yee; Supervisor Bierman; Garret Jenkins, Tenderloin Coalition. Amendment of the Whole 
reflecting amendments from City Planning and sponsor. 
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance amending Planning Code Sections 306.1 and 306.3 to require disclosure in a conditional use or 
variance application and notice for public hearing of the name under which the applicant intends to conduct 
business, and requiring that applications be signed under penalty of perjury; and authorizing the Zoning 
Administrator to reject and delay the re-filing of an application that includes material misstatements or 
omissions; amending Building Code Section 106.3 to require disclosure in a building permit application of the 
name under which the applicant intends to conduct business, and requiring that applications be signed under 
penalty of perjury, and authorizing the Director of Building Inspection to cancel and delay the re-filing of an 
application that includes material misstatements or omissions. 

(Amending Planning Code Sections 306.1 and 306.3; amends Building Code Section 106.3 ) 
(Planning Commission Resolution No. 14929 adopted November 18, 1999 recommending proposed 
amendment with revision disclosed in the resolution. Certification of Exemption from environmental review 
dated September 9, 1999.) 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



City and County of San Francisco 



Printed at 3:S4PM on IIV/V9 



Finance and Labor Committee 



Meeting Minutes 



December 1, 1999 



991619 (Establishment of Airport Special Event Account| 

Ordinance amending Administrative Code by adding Section 10 1 14-3 to establish an Airport Promotion and 
Event Account; allow for the acceptance of gifts by the Airport Commission, and, authorize the Airport 
Commission to expend monies in account (Airport Commission) 

(Fiscal impact; Adds Section 10.1 14-3) 

8/17/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

10/13/99, SUBSTITUTED Substituted by Airport Commission 10/13/99, bearing new mlc 

10/13/99. ASSIGNED to Finance and Labor Committee 

11/10/99, CONTINUED Continued to November 17 

1 1/17/99, CONTINUED Continued to December 1. 1999 

Heard in Committee Speakers Harvey Rose, Budget Analyst, Jon BaUesteros, Airport Supervisor Yee. 

Amendment of the Whole reflecting sunset clause, bi-monthh reports and unexpended monies must revert to 

general fund 

AMENDED, AN AMENDMENT Of nil WHOLI HI UUNGNEM HUE. 

Ordinance amending Administrative Code by adding Section 1<> 1 14-3 to establish an Airport Promotion and 

Event Account; allow for the acceptance of gifts by the Airport Commission; and. authorize the Airport 

Commission to expend monies in account; this section shall expire on September 30. 2001. (Airport 

Commission) 

(Fiscal impact; Adds Section 10.1 14-3 ) 
RECOMMENDED AS AMENDED by the following vo'e: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



992035 |Federal Grant for reimbursement of 75% of costs for reconstruction and overlay of % arious run» BJ I 
and taxiways at the Airport| 

Resolution authorizing Airport Commission to apply for, accept, and expend grant of $8,370,743.00 from 
Federal Aviation Administration for assistance in improvements at the Airport (A IP 14: Application No. 99- 
01). (Airport Commission) 

10/28/99, RECEIVED AND ASSIGNED to Finance and Ubor Committee 

Heard in Committee. Speakers: Haney Rose, Budget Analyst. Jon BaUesteros. Airport. 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



City and County of San Francisco 



Printed at 3:54 P\1 on IIZW 



Finance and Labor Committee 



Meeting Minutes 



December 1, 1999 



991923 [Expenditure of Community Court Program Fines] 
Supervisor Brown 

Ordinance amending Administrative Code by adding Section 10.1 17-124 to require the Controller to 
separately account for fines awarded to the City through community court dispute resolution programs and 
appropriating those funds to enhance public safety and the quality of life in the communities served by the 
community courts. 

(Adds Section 10.117-124.) 

10/12/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

1 1/17/99, CONTINUED Heard in Committee. Speakers: Harvey Rose, Budget Analyst, Kimiko Burton-Cruz, Director, Mayor's 

Criminal Justice Council; Supervisor Ammiano; Supervisor Yee. Continued to December 1, 1999. 

Continued to December 8, J 999. 
CONTINUED by the following vote: 

Ayes: 2 - Yee, Bierman 
Absent: 1 - Ammiano 



992026 [Purchase of 4.09 acres of PG&E property (2315 Cesar Chavez Street), leased by DPW since 1986 for 
storage of materials, placement/use of modular buildings and parking, essential for DP Ws continued 
operation] 

Resolution approving and authorizing an agreement between the City and County of San Francisco, as Buyer, 
and Pacific Gas and Electric Company as Seller, to purchase real property located at 23 15 Cesar Chavez 
Street, known as APN Block 4343 Lot 1A and SBE 135-38-22 Parcel 1, for a purchase price of Three Million, 
Eight Hundred Forty-One Thousand Dollars ($3,841,000); approving an agreement by the City to release and 
indemnify PG&E for hazardous materials; approving certain environmental deed restrictions; approving the 
assumption of a billboard lease affecting the property; approving certain limitations on the City's remedies 
against PG&E for breach; adopting findings that the purchase agreement is consistent with the City's General 
Plan and eight priority policies of the City Planning Code Section 101.1; authorizing the Director of Property 
to execute documents, make certain modifications and take certain actions; and ratifying prior acts. (Real 
Estate Department) 

(Fiscal impact.) 

10/27/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

11/17/99, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Tony DeLucchi, Real Estate Department. 

Continued to December 1, 1999. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Harry Quinn, Real Estate Department; 

Supervisor Yee. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Bierman 
Absent: 1 - Ammiano 



City and County of San Francisco 



Primed at 3:54 PM on I2W99 



Finance and Labor Committee 



Meeting Minutes 



December I, l<>'><) 



991991 |Public Service Easement V acation - 1098 Huron Avenue| 
Supervisor Yee 

Ordinance ordering the summary of vacation and sale of the public service casement located in Assessor's 
Block 7145, Lot 17, which comprises a portion of 1098 Huron Avenue, making findings pursuant to the 
California Streets and Highways Code Chapter 4 Sections 8330 et seq. (Public Streets, Highways, and Service 
Easements Vacation Law, Summary Vacation), making findings of conformity with the General Plan and 
priority policies of Planning Code Section 101. 1, and requesting official actions in connection w iih the 
vacation and sale. 
1 1/22/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee Speakers Harvey Rose Budget Analyst, Harry Quinn, Real Estate Department, 

Supervisor ) , . 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



992073 [Authorizing renewal and expansion of two leases of space on the ninth floor at Fox Plaza. 1390 Market 
Street for the Dept. of Children. Youth and their Families and the Delinquent) Prevention ( ommission| 

Resolution authorizing a lease of real property at 1390 Market Street lor the Department of Children, Youth, 
and their Families and for the Delinquency Prevention Commission. (Real Estate Department) 

99, RECETV1 1) AND ASSIGNED to Finance ind i jbor Commiltcc 
Heard in Committee Speakers Harvey Rose. Budget Analyst, Ham Qumn. Real Estate Department. 
Supervisor Yee 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee. Bierman 

Absent: 1 - Ammiano 



992120 |Permit for use of real property at 2350 19th Avenue by Delancey Street for the sale of Christmas trees 
and related holiday decorations. | 
Supervisor Yee 

Resolution authorizing the permit for use of real property at 2350 Nineteenth Avenue under the jurisdiction of 

the Fire Department. 

1 1/15/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee Speakers Haney Rose. Budget Analyst. Harry Qumn. Real Estate Department 

Supervisor Yee. Amended to provide for retroactivin 

AMENDED. 

Resolution authorizing retroactively, the permit for use of real property at 2350 Nineteenth Avenue under the 

jurisdiction of the Fire Department. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Yee. Bierman 

Absent: 1 - Ammiano 



City and County of San Francisco 



Printed at 3:S4 PM on 11 2 W 



Finance and Labor Committee 



Meeting Minutes 



December 1, 1999 



991859 [Purchase of property at 3rd and Arthur Streets to expand the Pump Station built in the 1960's, to 
comply with the current Regional Water Quality Control Board permit requirements] 

Resolution authorizing acquisition of Lots 3 and 4 in Assessor's Block 4501 for expansion of the Southeast 
Water Pollution Control Plant Booster Pump Station, and adopt findings pursuant to Planning Code Section 
101.1. (Real Estate Department) 

(Categorically exempt from environmental review and consistent with the eight priority policies of the 

Planning Code Section 101.1.) 

9/29/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

10/20/99, CONTINUED TO CALL OF THE CHAIR. 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst; Harry Quinn, Real Estate Department; 

Supervisor Yee; Bill Berry, Assistant General Manager, Finance, and Administration, Public Utilities 

Commission. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Bierman 
Absent: 1 - Ammiano 



992003 [San Francisco Chronicle Proposed Sale Investigation] 
Supervisors Ammiano, Bierman 

Resolution urging the Attorney General of California, based on the precedent established in the State of 
Hawaii, to investigate the proposed sale of the San Francisco Chronicle to the Hearst Corporation and potential 
violations of the Federal anti trust laws and violation of the National Newspaper Preservation Act and further 
urging the San Francisco District Attorney to conduct a similar investigation. 
10/25/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Supervisor Ammiano; Terence Hallinan, District Attorney; Tony Kilkoy, S.F 
Tomorrow; Bruce Bruggman, Editor, Bay Guardian; Steve Kawa. Mayor's Office; Gilbert Baker; Jane 
Morrison, President, S.F. Tomorrow; Chris Dittenhafer, Council of District Merchants; James Fang, Asian 
Week Newspaper; Supervisor Bierman; Supervisor Yee. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992024 [Reserved Funds, Mayor's Office/Committee on Information Technology] 

Hearing to consider release of reserved funds, Mayor's Office/Committee on Information Technology, (1999- 

2000 Budget), in the amount of $1,125,000 to allow the Year 2000 Project Management Office to continue its 

efforts to ready the City and the computer system for the year 2000. (Mayor) 

10/27/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Patty Fado, Committee on Information 

Technology (COIT); Supervisor Yee; Ed Harrington, Controller. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



City and County of San Francisco 



Printed at 3:54 PM on 12/2/99 



Finance and Labor Committee 



Meeting Minutes 



Det ember I. I '><><) 



992121 |CalVVIN - Approval of DHS Computer Services Project) 
Supervisor Yee 

Resolution authorizing the Executive Director of the Department of Human Sirs icea t<> enter into agreement 
with a consortium of counties to develop and provide computer services for the administration of public 
benefit programs in accordance with state requirements for which San Francisco's portion of the cost is 
$29,419,528.00. 

(Fiscal impact.) 

11/13 99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard m Committee Speakers Harvey Rose, Budget Analyst Sally Kipper, Department of Human Services 

Amendment of the Whole amending tide onh 

AMENDED. AN AMENDMENT Of I UK \MIOI r BE \KIM.M.\\ I 1 1 I.E. 

Resolution authorizing the Department of Human Scr\ ices to continue its membership in the 18-county 
Welfare Client Data System (WCDS) Consortium, and authorizing the Director of the Department of Human 
Services to execute the necessary agreements for participation in the consortium's development, 
implementation, maintenance and operation of a computet system tor the administration of public benefit 
programs in accordance with state requirements, for which San I rancisco's portion of the cost is 
$29,419,528.00. 

(fiscal impact.) 

RECOMMENDED AS AMENDED by the following vale: 
Ayes: 3 - Yee, Bierman, Ammiano 



992104 | Accepting State grant for development of programs designed to reduce jail crowding, crime and 

criminal justice costs while addressing the needs of mentallv ill offenders during imprisonment and upon 

release] 

Resolution authorizing the Sheriffs Department to accept a grant in the amount of S5, 000. 000 from the State 
Board of Corrections and expend the amount of $910,148 for Mentally III Offender Crime Reduction 
Demonstration Grant (Sheriff) 

1 1 10 99, RECEIVED AND ASSIGNED to Finance and Labor Committee Sheriff Department requests this item be considered at the 
12/1/99 Finance and Labor Committee meeting 

Heard in Committee. Speakers Haney Rose. Budget Analyst. Jean Mariani. Sheriff's Department 
Committee recommended that the Controller designate the two neM- positions created under the grant as "G". 
(grant funded), which would terminate when the grant expires. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992095 |Charitable Distribution of Food| 
Supervisors Yee, Ammiano 

Hearing to consider the City's practice of confiscating food distributed by charitable organizations, including 
Food Not Bombs, and arresting members of the clergy and other volunteers for distributing food. 
1 1/8/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

1 1/17/99, CONTINUED TO CALL OF THE CHAIR. Heard in Committee Speakers John Di Donna 
CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Yee, Bierman. Ammiano 



City and County of San Francisco 



Printed at 3:.U P\1 on 112V9 



Finance and Labor Committee Meeting Minutes December 1, 1999 

ADJOURNMENT 

The meeting adjourned at 1 1:55 a.m. 



City and County of San Francisco Printed at 3:54 P,\f on 12/2/99 



Public Library,Gov't Info. Ctr., 5 th Fir. 
Attn: Susan Horn 



.ZS^ 



h 



CITY AND COUNTY 




of^san franciscoDOCUMENTS DFPt 
NOV 2 9 1999 



BOARD OF SUPERVISORS 

PlJ BUC LIBRARY 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



BUDGET ANALYST 






November 24, 1999 
TO: , Finance and Labor Committee 

FROM: ^Budget Analyst 

SUBJECT: December 1, 1999 Finance and Labor Committee Meeting 
Item 2 -File 99-1619 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 17, 1999. 



Department: 
Item: 



Description: 



Airport 

Ordinance amending Article XIII, Chapter X of the 
Administrative Code by adding Section 10.114-3 to 
estabhsh a new Special Account known as the "Airport 
Promotion and Event Account"; to authorize the Airport 
Commission to accept cash donations, propert3 r , and 
personal services which would accrue to the Special 
Account; to authorize the Airport Commission to expend 
monies from the Special Account; to carry over 
unexpended monies in the Special Account from one fiscal 
year to the next; and to require quarterly reports to the 
Board of Supervisors on revenues to, and expenditures 
from, the Special Account. 

As requested by the Airport, the proposed ordinance 
would add a new Section 10.114-3 to Article XIII, Chapter 
X of the Administrative Code. This would authorize the 
Controller to establish a new Special Account known as 
the Airport Promotion and Event Account ("Special 
Account") to receive cash donations, property, and 
personal services. According to Mr. Jon Ballesteros of the 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Airport, such donations could only be used for business 
promotion, special events, and community outreach 
activities related to construction projects which are part of 
the Airport Master Plan, including the new International 
Terminal Building and the BART Airport extension. 
Attachment I, provided by the Airport, explains that 
because the Airport is seeking a number of donations in 
excess of $5,000, the Airport wants to establish a Special 
Account "in order to save the Board of Supervisors the 
time and effort of holding hearings to review a minimum 
of 75 to 115 separate resolutions allowing the Airport to 
accept donations for the opening of the new International 
Terminal." 

The proposed ordinance would also authorize the Airport 
Commission to (a) expend monies from the Special 
Account for the above-noted purposes without 
appropriation approval of the Board of Supervisors; (b) 
carry over the Special Account's unexpended balances 
from one fiscal year to the next; and (c) provide quarterly 
reports to the Board of Supervisors on revenues to, and 
expenditures from, the Special Account. 

Comments: 1. According to Mr. Ballesteros, the Airport proposes to 

spend approximately $1,000,000 on business promotion, 
special events, and community outreach activities related 
to the completion of projects in the Airport's Master Plan. 
Of this estimated $1,000,000, the Airport plans to obtain 
$700,000, or 70 percent of the projected budget, through 
fundraising efforts. The Airport would target its 
fundraising at the following corporate sponsors: (a) the 
retail concessionaires at the Airport, (b) the contractors 
who are working on Airport construction projects, and (c) 
the airlines which operate at the Airport. 

In addition to the anticipated donations of $700,000, the 
Airport proposes to expend $300,000 in Airport revenues, 
or 30 percent of the projected budget. In FY 1999-2000 
the amount of $300,000 has been separately budgeted 
within the Government Affairs budget for entertainment 
and promotion. Attachment II. a June 1. 1999 
memorandum from the Airport Director to the Airport 
Commission, explains the type of special events and 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



community outreach activities which are under 
consideration. 

2. Mr. Ballesteros advises that if corporate sponsorship 
generates more than 70 percent of the proposed budget, 
then Airport revenues would contribute commensurately 
less. Furthermore, if there is an unexpended balance in 
the Special Account once the Airport"s Master Plan has 
been completed, then those unexpended monies would be 
used to reimburse the Airport for expenditures previously 
made from Airport revenues. 

3. Mr. Ballesteros advises that the actual program of 
business promotion, special events, and community 
outreach activities that is implemented would depend on 
the level of contributions made by corporate sponsors. If 
the Airport is unable to obtain corporate contributions in 
the amount of $700,000, then its program of business 
promotion, special events, and community outreach 
activities would be tailored to fit a smaller budget. The 
Airport Director states in Attachment II that the specific 
events to be held will not be finally determined until "the 
fundraising effort is complete and a comprehensive 
budget can be established." 

4. According to Mr. Ballesteros, as a first step in the 
Airport's proposed program of business promotion, special 
events, and community outreach activities, the Airport 
Commission approved on June 1, 1999 a two year contract 
with Rita Barela Productions. This contractor will raise 
funds for, plan, and execute a series of special events and 
community outreach activities to celebrate the opening of 
the new International Terminal in the early summer of 
2000. 

Mr. Ballesteros advises that the Airport's contract with 
Rita Barela Productions was awarded on the basis of a 
Request for Qualifications which was sent on February 
22, 1999 to 65 Bay Area organizations specializing in 
event planning and execution, and advertised on the 
City's website and in the City's contracts announcement. 
The Airport received 15 proposals and interviewed five 
firms, selecting a team of three local firms headed by Rita 
Barela Productions, a certified MAYBE firm, on the basis 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Com mi;' 
December 1, 1999 Finance and Labor Committ- 



that Rita Barela Productions had the best qualifications 
for the development and execution of a special event and 
fundraising plan. As a result of the negotiations, Phase I 
of the contract with Rita Barela Productions (June - 
December of 1999) comprises five programs which will 
cumulatively cost the Airport a total of $150,000. The 
amount of $150,000 divided by the six months of Phase I 
results in a $25,000 per month retainer. No cost has yet 
been determined for Phase II (final planning and 
execution of events) because, as stated above, the exact 
program of special events and community outreach 
activities will depend on the level of contributions from 
corporate sponsors. Budgetary provision for $140,000 of 
the Airport's $150,000 contract with Rita Barela 
Productions has been made within the non-project- 
controlled entertainment and promotion subfund of the 
FY 1999-2000 Administration Business Program. 
According to Mr. Ballesteros, the balance of $10,000 has 
been carried forward from unspent funds in the non- 
project-controlled entertainment and promotion subfund 
of the FY 1998-99 Administration Business Program. 

5. According to Mr. Ballesteros, proposed Sections 
10.114-3(b) and (c) of the Administrative Code would 
override the existing requirement for Board of 
Supervisors approval for acceptance of gifts valued in 
excess of $5,000. Additionally, proposed Sections 10.114- 
3(b) and (c) would permit the Airport Commission to 
accept and expend all cash donations, property, and 
personal services for business promotion, special events, 
and community outreach activities related to the Airport's 
Master Plan, regardless of the amount, without approval 
of the Board of Supervisors. According to Mr. Ballesteros, 
the Airport anticipates that a large portion of the 
contributions that it hopes to attract from corporate 
sponsors would be in excess of $5,000. Expenditures from 
the Special Account would not be subject to appropriation 
approval by the Board of Supervisors. 

6. Due to the size of the projected budget, in the amount 
of $1,000,000. the Budget Analyst recommends, if the 
proposed ordinance is approved, that the ordinance be 
amended to give the Board of Supervisors specific 
authority' to approve (a) the acceptance of all cash 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



donations, property, and personal services valued in 
excess of $5,000, and (b) the appropriation of all 
expenditures in excess of S5.000. 

7. The Budget Analyst questions the appropriateness of 
the Airport soliciting contributions to the proposed 
Special Account from the Airport's concessionaires and 
contractors, as well as from the airlines which operate at 
the Airport. 

8. We are advised that an Amendment of the Whole will 
be submitted to provide for: 

• A sunset clause so that the subject ordinance would 
expire on September 30, 2001. This timeframe would 
accommodate the funding of special events related to 
the opening of both the new ITB in the summer of 
2000 and the BART Airport extension in the summer 
of 2001. 

• The submission of bi-monthly reports to the Board of 
Supervisors pertaining to Special Account revenues 
and expenditures, instead of the quarterly reports 
which had been proposed. 

• The transfer of an} 7 unexpended monies in the Special 
Account, when it expires on September 30, 2001, to the 
City Treasurer for deposit in the City's General Fund 
rather than permitting the Airport to use it to 
reimburse itself for expenses as outlined in Comment 
No. 2 above. 

9. Under Section 10.116 of the Administrative Code, the 
Airport Director is already able to accept and expend gifts 
to the Airport with a value of up to $5,000. It is only for 
gifts valued in excess of $5,000 that the Airport Director 
needs approval from the Board of Supervisors to accept 
and expend such gifts. In the Budget Analyst's 
professional opinion, the proposed ordinance is not needed 
because the Airport has ample time to submit, for 
approval by the Board of Supervisors, legislation 
accepting gifts in excess of $5,000 and expending gift 
funds in excess of $5,000 for business promotion, special 
events, and community outreach prior to actual 
expenditure of such funds. As of the writing of this 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committ* ■•• 

December 1, 1999 Finance and Labor Committee Meeting 



report, the Airport has not developed a comprehensive 
budget for the planned activities and special events. 

In Attachment I the Airport states that the Board of 
Supervisors would have to approve between 75 and 115 
separate resolutions to accept donations in excess of 
$5,000. However, according to Mr. Ted Lakey of the City 
Attorney's Office, the Airport could combine individual 
donations into one or two resolutions for Board of 
Supervisors approval. Furthermore, each resolution could 
be accompanied by a comprehensive expenditure plan for 
the Board of Supervisors to review simultaneously. 



Recommendation: Disapprove the proposed ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



■ROM :i 



Airport 
Co [mission 
Crry anc County 
of Ssr Francisco 

Willie L Brown, Jr 
Mayor 

Henry E_ Berrr.an 
Prsiiaen; 

Larry M&zzola 
Vice President 

Michse: S Svunsry 

Linde S. Creyson 

Caryl ho 

JOHN L MARTIN 
Airpor: Director 






:40 ST. 16:39 K( 




Attachm ent I 



San Francisco International Airport 



GATTWAY TO THE PACIFIC 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



MEMORANDUM 



TO: 



Harvey Rose 



DATE: 



November IS, 1999 



FROM: Peter J. NardozaM^ 

SUBJECT: I File #991619 - Airport Promotion and Event Account 



The Airport's S2.4 billion Master Plan and Capitol Program is near completion. This 
program includes a new International Terminal Building that will become the Airport's 
signature building and will provide travelers to the Bay Area with their first impression of 
San Franciscp and the surrounding communities. In many respects, it will become one of 
a few buildings that will represent San Francisco to domestic and international travelers. 

The openings of new international terrrunals in major cities throughout the world (i.e. 
Hong Kong, Denver, Kuala Lumpur, Milan Malpensa) have received international 
recognition and greatly enhanced the host city's visibility around the globe. 

As the City of San Francisco prepares to open what will be the largest International 
Terminal in North America, the Airport Commission is dedicated to ensuring that the 
City receives all of the positive national and international exposure this rare opportunity 
presents. With this in mind, the Airport Commission is planning to host a series of 
special events designed to celebrate the opening of the new International Terminal and to 
thank the Bay Area community. 



SAN FRANCISCO INTERNATIONAL AIRPORT • P.C BOX 8091 . SAN FRANCISCO CALIFORNIA 94128 . TELEPHONE 1650) 794-5000 • FAX (B50i 794-5005 



OT THU) n . 1 3* 99 



The goals of the opening events would be as follows: 



Attachment I 
^age 2 of 2 



• .Announce and celebrate the opening of what will be the largest International 
Terminal in North America 

• Introduce the Bay Area's newest world-class facility to the nation and the 
world. 

• Thank the Bay Area public, construction workers and airport employees for 
their patience and hard work during the construction period. 

A successful special events plan for the opening of the new International Terminal will 
help the Airport solidify its position as a global leader in the 21* Century and boost its 
reputation among passengers, employees, and business partners. 

In order to ensure success in this important endeavor, the Airport's special events 
contractor has developed a fund raising plan that calls for the recruitment of 75 to 1 1 5 
sponsors, at a minimum These sponsors will be asked to provide donations ranging from 
S5.000 to $250,000. A substantial number of the donations are expected to fall within the 
S5.000 to S25.000 range. 

With this in mind, the Airport is proposing that a special account be established in order 
to save the Board of Supervisors the time and effort of holding hearings to review a 
minimum of 75 to 115 separate resolutions allowing the Airport to accept donations for 
the opening of the new International Terminal. 

We have attempted to craft the proposed resolution in such a manner that it will provide 
the Board significant oversight of the proposed special account without a cumbersome 
review process for the Board to endure, and allows for the successful implementation of 
the Airport's special events plan. 



. — y , T . r .y 1 1 t v • ATI ON "^"V- 1 QW\~ (WED) i 0. 20 



9 : 32/ST. 9:il/NO. 



A r t. a cb.a en t 1 1 
?ase 1 cr 3 



Airoort 
Commission 



-;cirv fc. Seman 

..ce rres.csn: 
Micnaei i. Sruns* 
'.:r.oa S- C'ovjsn 



JOHN L MARTIN 
i.roor, Directs: 




San Francisco international Airport 



MEMORANDUM 

June 1, 1999 



TO: 



FROM: 



SUBJECT: 



MEMBERS. AIRPORT COMMISSION 
Hon. Henry E. Berrnan. President 
Hon. Larry Mazzola. Vice President 
Hon. Michael S. Strunsky 
Hon. Lincia S. Crayton 
Hon. Caryl Ito 

Airpon Director 

Authorization to Award a Contract for the Planning and Execution of Special 
Events for the Opening of the New International Terminal 



DIRECTOR'S RECOMMENDATION: AWARD CONTRACT FOR THE PLANNING AND 
EXECUTION OFi SPECIAL EVENTS FOR THE OPENING OF THE NEW- 
INTERNATIONAL TERMINAL TO RITA BARELA PRODUCTIONS. ACERJHTED 
W/MBE. FOR NOT MORE THAN SI 50.000 IN PHASE I (June-December. 1 999) AND AN 
-.MOi "NT TO BE DETERMINED FOR PHASE II (Final planning and execution of events). 

On February 16. 1999. the Airport Commission authorized star: to issue a Request for 
Qualifications (RF1Q) to plan and execute special events to celebrate the opening of the new 
International Terminal. Tnc RFQ requested qualifications to provide all catering, decoration and 
entertainment for tne opening events: design and implement, in conjunction with Airpon staff. 
Security; safety and transportation plans for each event produce and distribute all tickets and 
invitations: design and produce ail collateral materials', and design and implement, in eonjuncuon 
with Airpon staff, a fundraisine pian to help defray the costs of the events. The contract is for 
two years. 

Phase I of this contract is a S25.000 per month retainer for six months to develop and execute a 
fundraising pian with a <joal of raising SI million to offset the costs of the opening events, to 
develop ana produce collateral materials for the fundraising effort as well as preliminary 
production costs for a commemorative book, to celebrate the opening, preparing an overall 
timeline and schedule for the opening events, and developing and refining guest lists for the 
events. 

THIS PRINT COVERS CALENDAR ITEM NO. i - 



CAN FRANCISCO INTERNATIONAL AIRPORT . ? Q. BOX 809? • SAN FRANCISCO CALIFORNIA 94128 • TELEPHONE (650) 734-5000 • FAX |«»l 794-5005 



NALAV1ATI ?MENT 






Artachr.^r.t. ~- 
?ase 2 c: I 



Members. Airpon Commission 
June !. 1999 ' 
Pace 2 

The sencs or events now under consideration io celebrate me opening of the new International 
terminal includes weekend-long Community Open House? amiiy Day, u VIP Gaia Dinner, an 
Employee Open House (for ail airpon emoloyess), a 3uiiders Bash (for conn-actors and 
construction workers) and an event for the hospitaiiry/tour.sm industry. The specifics of these 
events will not be set unul Phase fl of this contract when the fundraising effon is complete and a 
comprehensive budge: can be established. 

On February 22, '1999, 65 requests for qualifications were issued to firms specializing in event 
planning and execution, and 15 firms submitted quaiificanon packets m response to the RFQ. A 
representative review committee selected five finalists and interviewed ail five. A team of three 
local firms, led by Rita Bareia Productions, and including Lynne Winsiow &. Associates and 
Timothy Maxson Productions, received the highest score, based upon their substantial local 
experience with government and non-profit agencies. 

Rita Bareia Productions is a certified MBE/W3E and is compliant with Chapters 123 and 12C o: 
the Administrative Code. The Human Rights Commission will work with Airpon Staff and Rita 
Bareia Productions to set M/WBE goals for Phase II of this contract. 

1 recommend ihatjthe Commission authorize staff to award this event planning and execuuon 
contract to Rita 3arela Producnons at a cost not to exceed SI 50,000 for Phase I and a cost to be 
determined for Ph'ase II. I will bring the cost of Phase II of mis contract to the Commission in 
eariy 2000 and before the final event plan is set in motion. 

0RK3NAL SIGNED 
BY JOHN L MARTIN 

John L. Martin 
Airpon Director 



Prenared bv: 



Peter Nardoza 

Deputy Airpon Director 

Pubiic Affairs 



v is, cv en L-ia ■■ :omii i jsi 



10 



,M S?0 INTIRNATIONAL AVIATION DEVELOPMENT (WED) 10. 20' 99 9:53/ST. 9:S:/NO. 



Attachment II 



?ase 3 of 3 
AIRPORT COMMISSION 

CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. SsLwi l-i=±= ~ 



AWARD OF CONTRA CT 

FOR PLANNING AND EXECUTION 

OF SPECIAL EVENTS TO OPEN 

THE NEW INTERNATIONAL TERMINAL 

WHEREAS, Tne San Francisco International Airport is an internationally recognized 
leader in safety and security, customer service, financial operations and 
environmental responsibility; and 

WHEREAS, The Airport is building a new International Terminal that will be its 

• signature building and a new symbol of San Francisco to the world; and 

WHEREAS, On February 1 6, the Commission approved Resolution 99-0040 which 

authorized staff to issue a Request for Qualifications to plan and execute a 
series of special events to celebrate the opening of the new International 
Terminal; and 

WHEREAS,; Airport staff received 15 proposals, interviewed five firms and selected a 
team headed by Rita Barela Productions of San Francisco, a certified 
M/WBE firm; and 

WHEREAS, Rita Barela Productions was determined to have the best qualifications for 

the development and execution of a special event and fundraising plan at a 
contract cost not to exceed SI 50,000 for Phase I and a cost to be 
. determined for Phase H. now, therefore be it 

RESOLVED. That this Commission authorizes the Director to award this contract for 
! the planning and execution of a series of special events to celebrate the 
: opening of the new International Te rminal for a two-yea r period 
commencing with certification of this contract 



/ hereby certify that the foregoing resolution was adopted by the Airpon Commission 
as ili meeting of 



Jmum Hq -P> J. 



Se cman 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Item 3 - File 99-2035 

Department: 

Item: 



Amount: 
Source of Funds: 
Program: 
Description: 



Airport 

Resolution authorizing the Airport to accept and expend a 
grant of $8,370,743 from the Federal Aviation 
Administration for capital improvements at the Airport. 

S8,370,743 

Federal Aviation Administration (FAA) 

Airport Improvement Program 14, Application No. 99-01 

The proposed resolution would authorize the Airport to 
accept and expend FAA grant funds for two capital 
improvement projects under the Airport Improvement 
Program (AIP). The proposed FAA grant would fund 
$8,370,743, or 75 percent, of the total costs of $11,160,990 
for the two capital improvement projects. A required 
match from Airport revenues would fund the remaining 
cost of $2,790,247, or 25 percent. 

The $11,160,990 total cost of the two capital improvement 
projects would be expended for the following projects: 

Runway 1R-19L Reconstruction and Overlay 

This project, with a total cost of $6,000,000, of which 
$4,500,000 is to be funded by the subject FAA grant, will 
provide for the reconstruction and overlay of 
approximately 1,000,000 square feet of Runway 1R-19L, 
together with all necessary and appurtenant work. The 
work will include replacing the cement-treated base of the 
runway and resurfacing the runway with asphalt, as well 
as upgrading the drainage and lighting as necessary. The 
purpose of this project is to enhance the safe operations of 
departing aircraft on the Airport's primary take-off 
runway. 

As-Needed Taxiwav Reconstruction and Overlay 

This project, with a total cost of $5,160,990, of which 
$3,870,743 is to be funded by the subject FAA. grant, will 
provide for the reconstruction and overlay of 
approximately 300.000 square feet of various taxiways, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



12 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Budset: 



together with all necessary and appurtenant work. The 
work will include strengthening the cement-treated base 
of the taxiways and resurfacing the taxiways with 
asphalt, as well as upgrading drainage and lighting as 
necessary. The purpose of this project is to enhance 
safety. Mr. Ernie Eavis of the Airport states that specific 
taxiways will be selected in accordance with the .Airport's 
pavement management system, operations inspection 
reports, and emergency work which takes the highest 
priority. 

Attachment I provided by the Airport contains a 
preliminary budget for the total estimated project costs of 
$11,160,990. 



Required Match: 



$2,790,247 from Airport Capital Improvement Program 
revenues. 



Comments: 



1. Mr. Eavis states that all construction contracts will be 
awarded to the lowest qualified bidder subject to approval 
from the FAA 



2. Attachment II contains a Grant 
Information Form prepared by the Airport. 



Application 



3. The Airport has completed a Disability Access 
Checklist, a copy of which is on file with the Clerk of the 
Board. 



Recommendation: 



Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



13 



DCAK.K&/(I » I KAfGrf-L*< i A I KJ« t-t£*_KAI. AVIAIrUK AONnM5TKrVI WW ».«..., 




OMB MO. »C-« C 1 «< 


PART III - BUDGET INFORMATION - CONSTRUCTION 


SECTION A - GENERAL 


F^ri^rol Domestic As s is in rv- r- C""3 log No. ^0 . 1 06 












SECTION B - CALCULATION OF FEDERAL GRANT 




lit* only for ftviitoni 


Total 
A—wnt 
Raouitad 


Cost Clarification 


Lo>* si Aaoro— a 

Ai«ii« 


♦or (-) 


Administration expense 


* LZ 


s 


S 111,000 


Preliminary expense 




Land, structures, right-of-way 








Architectural engineering basic fees 


1 


. 

781,000 


Other architectural engineering fees ' 


1 


Project inspection fees 7Z 


781,000 


Land development 








Relocation Expenses 




| 


Relocation payments to Individuals ano Businesses 








Demolition and removal 




| 


Construction and project improvement 


| 


9.4R7 pqn 


Equipment 








Miscellaneous 


1 




Total (Lmes 1 through 13) 






11,160,990 


Estimated Income (if applicable) 






11,160,990 


Net Project Amount (Line 14 minus 15) 




Less: Ineligible Exclusions 








Add: Contingencies 






-0- 


1 Total Project Amt. (Excluding Rehabilitation Grants) 




11,160,990 


i Federal Share reauested of Line 19 






8,370,743 


l Add Rehabilitation Grants Requested (100 Percent) 8.370,743 


2 Total Federal grant requested (Lines 20 & 21) 




8,370,743 


2 Grantee share 






2,790.247 


2 Other shares 




| Total project (Lines 22, 23 & 24) 


s 


j |j 11,160,990 



* Farm 510C-100 It 711 SUPERSEDES f «. A FORM 1100 -1C PACES 1 THRU 7 



Pag«4 



14 



I' p. ce 1 o 



1 of V 



grp A p7>.;siT 3,- ~? AKS°03 T ATI OM - FEDERAL tvuTipw a Duiwis tri -iqm 



SECTION C - EXCLUSIONS 


C1.t..l.cc.er, 


u.uta>u i- 


E-el-.c l„. 

C ""-f"c, P 


I* 


i 


1 




l 1 




<f. 




| 




1 




1 

,. T...I. IS ll 


SECTION D - PROPOSED METHOD OF FINANCING NON-FEDERAL SHARE 


21. Grantee Snare 


* 2.790.247 


a. Securities 




b. Mortgages 




c. Approbations (3y Applicant! 




d. Bonds 


2,790,247 


e. Tai Levies 




f. Non C2sh 




g. Other (Explain] 




h. TOTAL - G:2ntee snare 


2,790.247 


: 2R. Other Shares 




a. State 




b. Other 




c. Total Other Snares 




hjl TOTAL 


|s 2,790,247 


SECTION E - REMARKS 


1 


PART IV PROGRAM NARRATIVE (Attoc'n - Sre Instructions^ 



FA> Form 5100-100 IS-7H SU»EXSC3ES FAA fOK" S10G-IC PAGES I THRU 7 



Poo« 5 
, AC 7S-CT3J 



15 



Attachment II 

_., . Page 1 of 2 

rile .Numoer: 

Grant Application Information Form 

A document required to accompany a proposed resolution 
Authorizing a Department to Accept & Expend Grant Funds 

To: The Board of Supervisors 
Attn. Clerk of the Board 

The following describes the grant referred to in the accompanying resolution: 

1 . Department: _ Airport Commission Department 27 ^^^ 



2. Contact Person: Ernie Eavis , Deputy Airport Dir. Telephone: (650) 737-7747 

3. Project Title: airport Improvement Improvement fA.I.P.^ Grant ^ceen°r-.- 1 1 
-f. Grant Source Agencv: federal Aviation Administration (FAR) 

5. Type of Funds: _x_ Federal _ Federal-State (Pa^s-Through) Stare Local _ Private 

6. Proposed (New / Continuation) Grant Project Summary: 

Each year the Federal Aviation Administration, authorized under the .Airport 
Airway Safety and Capacity Expansion Act of 1987, permits San Francisco" 
International A.irport to apply for reimbursement of 75% of costs of elicible 
capital improvements up to the limit of entitlements determined by the 
previous years passenger and cargo levels. A. I. P. 14 (application) 99-01 
is for costs of reconstruction and overlaying Runways 1R-19L and various 
taxi ways . 

7. Amount of Grant Funding Applied for: $8,370,743.00 



8. Maximum Funding Amount Available: ss, 370,743 .00 



9. Required Matching Funds? Yes: x No: i Cash or In-icind? 

rAA grants are reimburseable up to limit of entitlement of 75^ 

COn^rmr*-innc r~r\<?~c~ 



>% of Airpc: 
constructions costs. 
If yes, list doiiar amount and identity source of Matching Funds in Department Budget: 

Airport Capital Improvement Procram 

10. Number of new positions created and funded: 5 

1 1. If new positions are created, explain the disposition of employees once the grant ends 



N/A 



16 



Attachment II 
r'age Z of 2 



1 2. Are indireci costs elicibie costs for this urant? Yes: 



If yes. please identify the amount of S in indirect costs 1 N/A 



13. Amount to be spent on contractual services: -0- 

14. a. ) Will contractual services be put out to bid? N/A 



b). If so. will contract services help to runner the goals of the department's MBE.'WBE 
requirements? 

H/A 



15. Is this likelv lo be a one-time or oneoinc reuuest for contracting out? One-time 



16. Term of Grant: Stan-Date: 03/30/99 End-Date: Open-ended until work comp] 

or grant is exhausted. 

1 7. Date Depanmem Notified of Available Funds: 10/01/98 

18. Grant Application Due Date: Grant Agreement was offered and accepted 3/30/99. 

19. Grant Funding Guidelines and Options (selected from RJP. grant announcement or 

appropriations legislation): 

All grants are prescribed by the Airport Safety and Capacity Extension 
Act of 1987, as well as Assurances (5/99) incorporated in each Grant 
Agreement. 



20. Department Head Approval: John L. Martin .- Air^rrt rirectcr 

fName) ? l/fll n (Title) 



m 



l/{£ignature) 



17 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Item 4 - File 99-1923 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 17, 1999. 

Department: Mayor's Criminal Justice Council 

Item: Ordinance amending Article XIII, Chapter 10, Part 

I of the San Francisco Municipal Code 
(Administrative Code) by adding Section 10.117- 
124 to require the Controller to separately account 
for fines awarded to the City through Community 
Court Dispute Resolution Programs and 
appropriating those funds to enhance public safety 
and the quality of life in the communities served by 
the Community Courts. 

Description: Community Courts, according to Mr. Travis Kiyota 

of the Mayor's Criminal Justice Council, are a State 
authorized means of diverting quality of life 
misdemeanor offenses from the traditionally 
backlogged courts and criminal justice system to 
the community where the offenses occurred. Mr. 
Kiyota advises that the quality of life misdemeanor 
cases referred to Community Courts include open 
alcohol containers, petty gambling, loitering, shop 
lifting, possession of small quantities of marijuana, 
grafitti, etc. Mr. Kiyota advises that in November 
of 1998, the City created two Community Courts in 
the City, one in the Bayview and one in the 
Oceanview-Merced-Ingleside (OMI) Community. 

The California Community Dispute Services, a non- 
profit organization, with the assistance of the 
District Attorney's Office, trains community 
residents and merchants to sit as the three 
volunteer panel members on each Community 
Court to hear these misdemeanor cases. The 
District Attorney's Office forwards letters to the 
individuals cited for the misdemeanor cases 
referring them to the specific Community Courts at 
a set-aside date and time. Alternatively, the 
individual cited with the misdemeanor can choose 
to go through the traditional court system to settle 
the matter. 

During the hearing before the Community Court, a 
Police Officer is present to read the case report. The 
BOARD OF SUPERVISORS 
BUDGET ANALYST 

IS 



Memo to Finance and Labor Commit!'- 

December 1, 1999 Finance and Labor Committee Me 



panel members then question the individual 
regarding the misdemeanor case. The panel then 
decides on the case, and if found guilty, the panel 
typically gives the individual a choice of paying a 
fine or performing community service. 

If the individual chooses community service, they 
are referred to the Pretrial Diversion Project, a 
non-profit organization, that provides community 
services, under contract with the Sheriff and the 
Department of Parking and Traffic. If the 
individual chooses community service, the 
individual will be required to perform the 
community service hours in the community where 
the misdemeanor occurred. Mr. Kiyota reports that 
those individuals choosing to pay the fine are 
required to pay the fine to the City and County of 
San Francisco. According to Mr. Kiyota, the 
California Community Dispute Services collects the 
fines and forwards the checks to the Fiscal Division 
of the Police Department, which deposits the funds 
into a Bank of America account, known as the 
Community Court Dispute Resolution Program 
Funds. 

As of November 3, 1999, Mr. Kiyota reports that 
the Community Court Dispute Resolution Program 
had a balance of $12,262 in the Bank of America 
account, including $11,137 from the Bayview and 
$1,125 from the OMI. To date, Mr. Kiyota advises 
that none of the collected fines have been expended. 
According to Mr. Kiyota, if the proposed ordinance 
is approved, all of these funds will be transferred to 
the proposed Controller accounts. 

Mr. Kiyota advises that the OMI Community Court 
is planned to be expanded to include the entire area 
covered by the Taraval Police Station, and to be 
renamed the Taraval Community Court. The 
proposed ordinance would require the Controller to 
separately account for the penalties, fines and 
other payments awarded to the City and County by 
(1) the Bayview Community Court. (2) the Taraval 
Community Court and (3) any additional 
Community Courts established in other San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Francisco neighborhoods. Furthermore, Mr. Kiyota 
reports that the penalties, fines and other 
payments referenced in the proposed ordinance 
would include the fines received bj r the Community 
Courts from the individuals cited for the 
misdemeanors as well as any other gifts of funds 
that the Community Courts might receive. Mr. 
Kiyota reports that to date, the Community Courts 
have not received any gifts of funds, but there has 
been no means to accept such gifts. 

Under the proposed ordinance, funds deposited into 
each of these Community Court accounts could only 
be expended to enhance public safety and the 
quality of life in that specific community (i.e., 
Bayview, Taraval or other neighborhood 
communities), and to support the specific 
Community Court Programs. In other words, the 
funds awarded by the Bayview Community Court 
could only be expended to enhance public safety 
and the quality of life in the Bayview Community 
and to support the Bayview Community Court 
Program. 

In accordance with the proposed ordinance, the 
Director of the Mayor's Criminal Justice Council, in 
consultation with the Police Chief, District 
Attorney, Chief Executive Officer of the Superior 
Courts and the Controller shall establish guidelines 
for the specific disbursement of the penalties, fines 
and other payments, consistent with the guidelines 
outlined above. Any expenditure of $5,000 or less 
could then be disbursed by the Director of the 
Mayor's Criminal Justice Council, in consultation 
with the Police Chief, District Attorney and the 
Chief Executive of the Superior Court. Any 
expenditure in excess of $5,000 would also require 
appropriation approval by the Board of 
Supervisors. As stated in the proposed ordinance, 
all costs that may be incurred by any City 
department in administering these monies shall be 
absorbed within that department's existing budget. 

Comments: 1. According to Mr. Eugene Clendinen of the 

Mayor's Criminal Justice Council, the initial two 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

20 



mo to Finance and Labor Commit- 
December 1, 1999 Finance and Labor Committee Meeting; 



Community Courts were established as a pilot 
program to address minor misdemeanors occurring 
in these communities, that are diverted from the 
Trial Courts. Mr. Clendinen reported that these 
two Community Courts were established through 
an initial S50.000 Federal law enforcement block 
grant and have been continued with a SI 50.000 
Federal Department of Justice grant. According to 
Mr. Kiyota. the current Federal law enforcement 
grant ends in April of 2000. Mr. Kiyota reports that 
if these projects are determined to be successful, 
the Mayor's Office will recommend other funding 
sources to continue the operations of these 
Community Courts. 

2. Mr. Ed Harrington reports that he has reviewed 
the proposed ordinance, which would require the 
Controller to separately account for the fines 
awarded to the City through the Community Court 
Dispute Resolution Programs. Mr. Harrington 
advises that this is a preferable arrangement than 
an earlier version of this legislation which had 
required the creation of additional Special Funds 
by the Controller's Office. According to Mr. 
Harrington, any interest earnings from the 
proposed funds will accrue to the City's General 
Fund. 

3. Mr. Kiyota advises that the proposed ordinance 
specifically states that "No cost that may be 
incurred by any City department in administering 
these monies shall be recovered therefrom." 
Therefore. Mr. Kiyota reports that under the 
proposed ordinance, neither the Controller nor any 
other City department would receive 
reimbursement for the costs of administering the 
proposed accounts. The costs to administer these 
funds are generally minimal, according to Mr. 
Harrington. However. Mr. Harrington advises that 
if maintaining these accounts becomes a problem, 
the Controller's Office will notify the Board of 
Supervisors at that time, in order to remedy the 
situation. 



BOARD OF SUPERVISORS 
BUDGET .ANALYST 

21 






Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



4. As noted above, the current two Community 
Courts have been initiated with grant funds, which 
are due to terminate in April of 2000. 
approximately five months. Based on discussions 
witb the Mr. Kiyota, although the funds can be 
used to support the Community Court programs, 
the main purpose of the proposed ordinance is to 
expend the funds collected by the Community 
Courts to enhance public safety and the quality of 
life in each of the Community Court communities. 
Mr. Kiyota furthermore notes that the funds 
generated by the Community Courts are not 
sufficient to sustain the overall operations and 
maintenance of the Courts. 

Mr. Kiyota reports that each Community Court 
currently has two staff members, one from Pre-trial 
Services and one from the California Community 
Dispute Services, both non-profit organizations. 
Mr. Kiyota estimates that the operating costs for 
each of the Community Courts is approximately 
$70,000 to S80,000 annually. As noted above, these 
Community Courts have been funded with grant 
funds, that terminate in April of 2000. Therefore, 
the Budget Analyst suggests that before a long- 
term decision is made regarding how the funds 
generated by the Community Courts would be 
spent, which is the subject of the proposed 
legislation, a long-term funding source should be 
identified to provide the ongoing operations and 
administration for the Community Courts, if they 
prove successful. 

5. In accordance with the proposed ordinance, 
appropriation of funds less than $5,000 would not 
be subject to the Board of Supervisors approval. 
The Budget Analyst notes that since the creation of 
the two Community Courts in November of 1998, 
approximately one year ago, a total of only $12,262 
has been generated by the fines and penalties 
assessed by the two Community Courts. Given the 
amount of funds currently being generated by each 
of these Community Courts, it is not likely that 
there would be allocations of funds greater than 
$5,000 in the near future. Mr. Kiyota responds that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

22 



Memo to Finance and Labor Commit; 

December 1, 1999 Finance and Labor Committee Meeting 

he anticipates the expenditures would be in 
increments of approximately $500 or less, which, in 
accordance with the proposed ordinance, would not 
be subject to the Board of Supervisors approval. 

6. At the November 17. 1999 Finance and Labor 
Committee Meeting, the Chair requested that the 
Mayor's Criminal Justice Council provide 
assurances that (1) the individual civil rights of 
those persons being charged with the 
misdemeanors are protected; (2) the meetings of the 
Community Courts are tape recorded; and (3) the 
guidelines include protections to assure that the 
funds collected do not go to those persons or 
organizations who are members of the Community 
Covr 

Recommendations: As discussed in Comment No. 4, a long-term 
funding source should be identified to provide the 
ongoing operations and administration for the 
Community Courts, if they prove successful, before 
a long-term decision is made regarding how the 
funds generated by these same Community Courts 
would be spent, which is the subject of the proposed 
legislation. 

Approval of the proposed ordinance is a policy 
matter for the Board of Supervisors. 






BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Item 5 - File 99-2026 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 17, 1999. 



Department: 
Item: 



Amount: 



Source of Funds: 



Description: 



Real Estate Department 
Department of Public Works 

Resolution approving and authorizing a Purchase 
Agreement between the City and County of San 
Francisco, as buyer, and Pacific Gas and Electric 
Company (PG&E), as seller, to purchase real 
property located at 2315 Cesar Chavez Street, 
known as Assessor's Block Number 4343, Lot 1A, 
for a purchase price of $3,841,000; approving an 
agreement by the City to release and indemnify 
PG&E for hazardous materials; approving certain 
environmental deed restrictions; approving the 
assumption by the City of a billboard lease 
affecting the property; approving certain 
limitations on the City's remedies against PG&E 
for breach; adopting findings that the purchase 
agreement is consistent with the City's General 
Plan and eight priority policies of City Planning 
Code Section 101.1; authorizing the Director of 
Property to execute documents, make certain 
modifications and take certain actions; and 
ratifying prior acts. 

$3,841,000 purchase price 

81.000 title and closing costs 
$3,922,000 Total 

$3,109,978 Real Property Special Revenue Fund 
812.022 Prior Year Overhead Carryforwards 
$3,922,000 Total 

The proposed resolution would authorize the Citj r , 
through the Real Estate Department, to purchase 
from PG&E, for $3,841,000, 4.09 acres (178,161 
square feet at approximately $21.56 per square 
foot) of property located at 2315 Cesar Chavez 
Street, on the south side of the street, between 
Kansas Street and Evans Avenue. The proposed 
unimproved land parcel to be purchased, currently 
has four City-owned trailers, three billboards and 
various DPW vehicles located on the site. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



24 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Since February 7, 1986, the proposed parcel has 
been leased by the City from PG&E. Currently, 
under a revocable license agreement, the City pays 
PG&E a license fee of S'24.422 per month, or 
$293,064 annually. 

Under the existing license agreement, the 
Department of Public Works (DP\V) uses the 
proposed site for DPW's Emergency Department 
Operations and Training trailer, parking of over 
100 vehicles for DPWs Bureau of Street and Sewer 
Repair operations and for the storage of materials. 
Ms. DeVaughn notes that the proposed site is 
located adjacent to the City-owned DPW 
Operations Yard property at 2323 Cesar Chavez 
Street. In addition, Ms. Marcia DeVaughn of DPW 
reports that the site currently houses (1) one 
Department of Parking and Traffic trailer for 
administrative operations for the Parking Control 
Officers (PCOs) that accompany DPW's street 
sweepers each day, (2) one Public Utilities 
Commission (PUC) trailer for Sewer Operations 
administration and (3) one DPT trailer that is 
currently used for storage purposes. According to 
Ms. DeVaughn. if the proposed site is purchased, 
the DPW plans to continue to use the property for 
the same purposes. 

On July 28, 1997, the Board of Supervisors 
approved a Master Settlement Agreement between 
the City and PG&E, including a Memorandum of 
Understanding (MOU). which outlined the 
principal terms and conditions under which PG&E 
would sell and the City would purchase the subject 
property (Ordinance No. 304-97. On May 17. 1999, 
the City, through the Real Estate Department, and 
PG&E entered into a subsequent MOU. which 
reiterated the terms and conditions of the previous 
MOU, but extended the time schedules to be able to 
complete the approval of the proposed Purchase 
Agreement to within 180 days of the date of the 
MOU, which now extends through December 7. 
1999. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



23 



Memo to Finance and Labor Committee 

December 1. 1999 Finance and Labor Committee Meeting 



In accordance with the proposed resolution and 
PG&E's required terms for the proposed sale of the 
property, the City must release PG&E for 
hazardous materials present on the subject 
property as of the closing date of the proposed sale 
and indemnify and hold PG&E harmless from 
releases of hazardous materials after the closing, if 
such hazardous materials were not present on the 
property as of the closing, or if the City causes 
releases of previously disclosed hazardous 
materials. Mr. Jesse Smith of the City 7 Attorney's 
Office advises that the proposed Purchase 
Agreement is basically an "as is sale" and that the 
City is familiar with the site conditions both based 
on its past use and on hazardous materials testing 
done on the property. However, Mr. Smith advises 
that the proposed agreements contain (1) mutual 
release provisions, for both the City and PG&E, to 
agree not to sue each other with respect to 
hazardous materials; (2) indemnification and hold 
harmless provisions by the City in favor of PG&E 
against third party claims, which are limited to 
certain claims that arise after the closing for 
matters that are within the City's control; and (3) 
limitations on certain remedies to the City, such as 
monetary claims for a breach by PG&E and a 
waiver of jury trials. According to both Mr. Smith 
and Ms. Elaine Warren of the City Attorney's 
Office, the proposed provisions are commercially 
reasonable for the City, given the overall provisions 
of the proposed Purchase Agreement, and assuming 
that the proposed purchase price takes into account 
these provisions. 

Mr. Jesse Myres of the Department of Real Estate 
advises that the proposed PG&E site used to be a 
natural gas storage site, and various hazardous 
materials may have been used on the site. 
However, Mr. Smith and Ms. Warren report that 
over several years, there has been environmental 
testing and analysis of the proposed site, which the 
Regional Water Quality Control Board has 
reviewed. Mr. Smith further advises that a letter 
from the Regional Water Quality Control Board 
found that no remediation of the site related to the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

former natural gas storage facility was necessary, 
so long as the proposed parcel was used for 
industrial or commercial purposes. 

Therefore, as required by PG&E, the Purchase 
Agreement restricts the City's use of the property 
for industrial or commercial purposes. Mr. Myres 
reports that if the City wants to use the property 
for other purposes in the future, the Purchase 
Agreement stipulates that the City would be 
required to apply to the appropriate regulatory 
agency for such use (i.e., Regional Water Quality 
Control Board), and also receive PG&E's consent, 
which cannot be reasonably withheld. Mr. Myres 
advises that the valuation of the property was 
based on the use for only industrial and commercial 
purposes. 

In addition, the Purchase Agreement stipulates 
that the groundwater under the property will not 
be used as a water supply. Mr. Myres advises that 
the site contains serpentine rock, which is natural 
to this area of the City, however, such serpentine 
rock contains natural asbestos. Due to the 
proximity of the Bay and the groundwater on this 
site, coupled with the natural occurring asbestos. 
Mr. Myres reports that the restriction to not use 
the groundwater as a water supply was included, 
as required by PG&E. 

Furthermore, there is also a 30-foot wide easement 
that PG&E would reserve in the deed for overhead 
electric facilities for PG&E, which is located along 
the western border of the property, adjacent to the 
DPWs operations yard (See Comment 6 for 
additional details). 

Under the proposed resolution, the City will 
assume the existing PG&E lease with Outdoor 
Systems, Inc. for the billboards on the subject 
property (See Comment 7 for additional details). 

Comments: 1. Mr. Myres reports that the proposed purchase 

price of $3,S41,000 and the terms and conditions of 
the proposed acquisition represent the fair market 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



value for this property at the time of the 
Settlement Agreement in 1997. 

2. In addition to the proposed purchase price of 
53.841,000, in accordance with the proposed 
Purchase Agreement, the City will pay land survey 
(S10,000), closing costs (82,500), extended coverage 
title insurance (S5,500), environmental inspection 
fees ($8,000) and prorated costs of Property Taxes 
($55,000), resulting in total additional costs of 
881,000 according to Mr. Myres. 

As part of the existing revocable license agreement 
between PG&E and the City, the City is 
responsible for annually reimbursing $55,000 of 
Property Taxes to PG&E, which PG&E pays to the 
State Board of Equalization. As noted above, these 
Property Taxes would be prorated and paid as part 
of the purchase for the parcel. Once the City 
purchases the subject property, these Property 
Taxes would no longer be paid by the City. 

3. Ms. Tina Olson of DPW reports that 83,109,978 
was included m DPW's FY 1999-2000 Capital 
Improvement Project budget (Real Property Special 
Revenue Fund) for the purchase of the proposed 
parcel at 2315 Cesar Chavez Street. Ms. Olson 
reports that such funds were made available 
through the 1998 sale of DPW's surplus property at 
7t h and Channel Streets to Maycor, Inc., the high 
bidder, for $3,867,000. In addition, Ms. Olson 
advises that the balance of 8812,022 ($3,922,000 
total purchase and closing costs less S3,109.97S FY 
1999-2000 Capital Budget appropriation) would be 
funded with DPW overhead monies that were 
appropriated in previous years, and carried forward 
for this purpose. 

4. The proposed sale of the property would be 
subject to the California Public Utilities 
Commission (CPUC) approval. In accordance with 
the proposed resolution and Purchase Agreement, 
PG&E is obligated to use diligent efforts to obtain 
the CPUC's approval. Either the City or PG&E can 
terminate the proposed Purchase Agreement if the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

28 



Memo to Finance and Labor Commute 

December 1, 1999 Finance and Labor Committee Meeting 

CPUC does not authorize approval of the proposed 
sale of the property within 23 months from the date 
that the application is submitted to the CPUC for 
approval. Mr. Smith reports that, once the 
Purchase Agreement is signed and the application 
is completed, it is estimated to take approximately 
12 to 18 months to receive the CPUC's approval, 
and that the CPUC is generally required by law to 
act within 18 months. 

5. The proposed resolution would adopt the findings 
that the Purchase Agreement is consistent with the 

s General Plan and the eight priority policies 
of City Planning Code Section 101.1. On October 
20. 1999, the Director of Planning submitted a 
report which found that the proposed Purchase 
Agreement is consistent with the City's General 
Plan and the eight priority policies of City Planning 
Code Section 101.1. 

6. The proposed Purchase Agreement stipulates a 
30-foot wide easement, where existing PG&E 
electric overhead power lines are located, along the 
western border of the PG&E property, immediately 
adjacent to the DPW operation yard. According to 
Mr. Myres, the deed for the proposed property will 
contain this 30-foot wide easement, which prohibits 
the drilling of any wells or the construction of any 
buildings or reservoirs, but provides for the City's 
use of the surface within the 30-foot wide easement 
area. 

Currently, Ms. DeVaughn reports that DPW's 
emergency operations trailer, which is seismically 
anchored and contains numerous telephone, 
computer and satellite communications, is located 
within the 30-foot wide easement area. However, 
Ms. DeVaughn and Mr. Smith advise that they are 
currently discussing this issue with PG&E to seek 
clarification of the ability to retain the trailers in 
their current location, since these trailers have 
been located on this same site for years, with the 
previous permission of PG&E. According to Ms. 
DeVaughn, the estimated cost to relocate this 
trailer would be $50,000 to S 100.000. Ms. Olson 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

29 



Memo to Finance and Labor Committee 

December 1. 1999 Finance and Labor Committee Meeting 



reports that, if the trailers need to be relocated, 
such funds would need to be budgeted. 

7. According to Mr. Myres. under a current year-to- 
year agreement between PG&E and Outdoor 
Systems, PG&E presently receives $3,170 of 
annual revenue from Outdoor Systems for the three 
billboards on the subject property. Ms. DeVaughn 
advises that the billboards do not interfere with 
DPW operations on the site. Mr. Myres advises 
that, if the City enters into the proposed Purchase 
Agreement, once the existing lease with Outdoor 
Systems expires, it is the City's intention to enter 
into a new agreement with Outdoor Systems at 
market rate rents for the three billboards on the 
property. Mr. Myres estimates that such rental 
revenues should be approximately $5,000 annually 
and reports that such revenues would accrue to the 
City's General Fund. 

8. Although the City, through the DPW, has leased 
the subject property since 1986, a period of over 13 
years, Mr. Smith and Ms. Warren advise that the 
City was not able to purchase the property at an 
earlier date due to years of negotiations between 
the City and PG&E over the price and the 
investigation of potential hazardous materials 
located on the site. As discussed above, on July 28, 
1997, the Board of Supervisors approved a Master 
Settlement Agreement between the City and 
PG&E, which included an MOU outlining the 
parameters for PG&E to sell the City the proposed 
property. As a result, the City now has through 
December 7, 1999, to approve the proposed 
Purchase Agreement, as required by the 
subsequent MOU of May 17. 1999, entered into by 
PG&E and the City, through the Real Estate 
Department. Therefore, Mr. Myres advises that if 
the City does not approve the proposed Purchase 
Agreement, by December 7, 1999, then PG&E does 
not have to sell the proposed site at the previously 
agreed price of $3,841,000. 

9. Based on the current annual rental costs of 
$293,064 and the additional annual Property Taxes 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



in 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



of $55,000, DPW is currently paying a total of 
$348,064 annually to PG&E to lease the subject 
property. Under the proposed license agreement, as 
of July 1, 2001, the current annual rents will be 
adjusted to current market rates. Given the 
proposed one-time purchase price of $3,841,000 and 
the one-time closing costs of $81,000, the City will 
incur a total one-time cost of $3,922,000 to 
purchase the proposed property. The City, through 
DPW, has been leasing the subject property for the 
past 13 years and reports a continuing need for use 
of the property for DPWs equipment, vehicles and 
storage. Therefore, the Budget Analyst estimates 
that by purchasing the subject property outright 
and not paying future rental and Property Tax 
payments, the City will realize total savings 
equivalent to the $3,922,000 purchase and d 
costs of the property within 11 years, and at least 
$350,000 in savings annually thereafter. 

10. Given that (1) DPW continues to have an 
ongoing need for use of the subject property, which 
is located immediately adjacent to the City-owned 
DPW operations yard; (2) the City has leased the 
subject property for the past 13 years at the current 
annual cost of $293,064. plus $55,000 annually for 
Property Taxes, for a total annual cost of $34S,064; 
(3) the purchase price of S3, 84 1,000, including 
closing costs of $81,000, for total one-time costs of 
$3,922,000 and the terms and conditions of the 
proposed acquisition represent the fair market 
value for this property; (4) by purchasing the 
property outright, the City will realize total savings 
equivalent to the $3,922,000 purchase and closing 
costs of the property within 11 years, and at least 
$350,000 in savings annually thereafter; (5) the 
City Attorney has determined that the proposed 
releases, indemnification and limitations are 
commercially reasonable, based on the 
determination by the Real Estate Department that 
the purchase price reflects those terms; and (5) the 
funds have already been appropriated for this 
purpose, the Budget Analyst recommends approval 
of the proposed Purchase Agreement. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance and Labor Committee 
December 1, 1999 Finance Committee Meeting 

Item 6-99-1991 



Department: 
Item: 



Description: 



Comments: 



Department of Real Estate (DRE) 

Ordinance (a) ordering the summary vacation and sale of 
the public service easement located in Assessor's Block 
7145, Lot 17, which comprises a portion of 1098 Huron 
Avenue, (b) making findings pursuant to the California 
Streets and Highway Code, Chapter 4, Sections 8330 
(Public Streets, Highways and Service Easements 
Vacation Law, Summary Vacation), (c) making findings of 
conformity with the City's General Plan and Priority 
Policies of Planning Code Section 101.1, and (d) 
requesting official actions in connection with the vacation 
and sale. 

The proposed ordinance would authorize (a) summary 
vacation of a City-owned five-foot easement, which 
comprises a portion of the property located at 1098 Huron 
Avenue, and (b) authorize the sale of such easement to the 
owner of the property at 1098 Huron Avenue. 

1. According to Mr. Gerald Romani of DRE, the easement, 
located on Lot 17 of Assessor's Block 7145, consists of 
approximately 467 square feet, and was designated as a 
public service easement in 1912 to provide a public right- 
of-wav. 



2. Mr. R.omani reports that the property owner of 1098 
Huron Avenue began construction on a three-unit 
condominium building on the property, after obtaining 
building permits but prior to obtaining Department of 
Public Works (DPW) approval of the subdivision map. 
According to Mr. Romani, DPW determined that the 
property owner had built on the subject easement, and 
requested that DRE appraise the market value of the 
easement and negotiate the sale to the property owner. 
DRE is now proposing to sell the subject easement to the 
owner of the property at 1098 Huron Avenue, for S2S.000 
(approximately 467 square feet at $60 per square foot). 
Mr. Romani advises that the proposed purchase price of 
the easement represents fair market value, based on an 
appraisal of comparable vacant land sales. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Memo to Finance and Labor Commit- 
December 1, 1999 Finance Committee Meeting 



3. According to Mr. John Malamut of the City Attorney's 
Office. California Streets and Highways Code, Section 
8333, permits the City to summarily vacate the public 
ice easement, subject to Board of Supervisors 
approval, if the easement has not been used for its 
designated purpose for five consecutive years. As stated 
in the letter from the Department of Pubbc Works, the 
subject lot "serves no purpose as a public right-of-way and 
has not done so for manv vears". 



Recommendation: Approve the proposed ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Item 7 - File 99-2073 



Departments: 



Item: 



Location: 



Children. Youth and Their Families (DCYF) 
Delinquency Prevention Commission (DPC) 

Resolution authorizing an amendment to two 
existing leases of real property at 1390 Market 
Street for the Department of Children, Youth and 
Their Families and for the Delinquency Prevention 
Commission. 

Suite 925 on the Ninth Floor at 1390 Market 
Street, Fox Plaza 



Purpose of Lease: Administrative Offices for DCYF and DPC 

Lessor: Calfox, Inc. 

Lessee: Department of Children, Youth and Their Families 

(See Comment No. 6) 

Term of Lease: To commence upon completion of tenant 

improvements, or approximately January 1, 2000, 
for the addition of Suite 925. When DPC and DCYF 
leases expire on November 30, 2000, commence 
new lease term of five years, or through November 
30, 2005. 

Number of Square Feet 

And Cost Per Month: Beginning approximately January 1, 2000, DCYF 
would occupy an additional 1,217 square feet of 
space in Suite 925 at approximately $2.33 per 
square foot per month ($28 per square foot 
annually), for an additional monthly cost of 
approximately $2,840. Currently, DCYF and DPC 
occupy space at a cost of $7,694 monthly. 
Therefore, under the amended lease, the total 
monthly costs will be $10,534. 

Beginning on December 1, 2000, the base monthly 
rent for a total of 7,237 square feet of space (5,143 
square feet for DCYF + 877 square feet for DPC + 
1,217 square feet of additional subject space) will 
be $2.50 per square foot per month ($30 annually). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Commi:: 

December 1, 1999 Finance and Labor Committee Meeting 



Annual Cost: 



Utilities and Janitor 
Provided by Lessor: 

Source of Funds: 



Right of Renewal: 
Description: 



or a total of $18,093 monthly. See Comment 1 for 
details regarding changes in square footage. 

As of January 1. 2000, annualized costs of $126,408 
(Monthly costs of S10.534 x 12 months). As of 
December 1. 2000, annualized costs of $217,116 
(Monthly costs of $18,093 x 12 months), an 
increase of 72 percent. 



Yes 



Proposition J Children's Special Funds in current 
fiscal year; Proposition 10 Trust Funds from State 
tobacco surtaxes to be used for portion of funds in 

future fiscal years. 

One five-year option to extend at fair market rents 

The proposed resolution would authorize the 
Department of Children. Youth and Their Families 
(DCYF) and the Delinquency Prevention 
Commission (DPC) to amend two existing leases, 
which both expire on November 30, 2000, in order 
to renew and expand such leases on the ninth floor 
of the Fox Plaza building, located at 1390 Market 
Street. On October 9, 1995, the DCYF entered into 
their lease for 4.991 square feet of space in Suites 
918 and 924 in Fox Plaza at a current annual cost 
of $83,969, or $16.82 per square foot of space. On 
November 2, 1995, the DPC entered into their 
lease for 860 square feet of space in Suite 901 in 
Fox Plaza at a current annual cost of $15,201, or 
approximately $17.68 per square foot of space. 

Under the proposed lease expansion and extension, 
there would be no change in the rent currently 
being paid by DCYF and DPC for the space they 
presently occupy m Suites 918, 924 and 901 until 
then- leases expire on November 30, 2000. 
However, under the subject amendment to this 
existing lease, an additional 1.217 square feet of 
space would be added for DCYF in Suite 925 at a 
cost of approximately $28 per square foot for 
approximately one year, after tenant improvements 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



36 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

are completed on that space. Beginning on 
December 1. 2000, one new five-year lease term 
would commence for the entire expanded 7.237 
square feet of space at an annual cost of S30 per 
square foot. 

Comments: 1. Mr. Charlie Dunn of the Department of R,eal 

Estate reports that in June of 1996, the Building 
Owners and Managers Association (BOMA) 
readjusted their standards for calculating the 
amount of rentable square footage to include a 
greater pro rata share of the common areas of a 
building to be charged to each tenant. Such 
common areas include the corridors, bathrooms, 
lobby and janitorial and mechanical rooms. As a 
result, CalFox, Inc., the lessor, will readjust the 
amount of rentable square feet that is included in 
the proposed new lease of space for the DCYF and 
the DPC. Under the proposed recalculations of 
space, the previous 4,991 square feet for DCYF will 
be readjusted to 5,143 rentable square feet, an 
increase of 152 square feet, or a three percent 
increase. The previous 860 square feet for DPC will 
be readjusted to 877 rentable square feet, an 
increase of 17 square feet, or a two percent 
increase. 

2. According to Mr. Cedric Yap of the DCYF, in 
1995, when DCYF initially entered into this lease, 
the Department had approximately 15 DCYF staff 
and up to five Starting Points Initiative staff, for a 
total of up to 20 staff. Mr. Yap reports that the 
Starting Points Initiative is a public/private policy 
and planning project dedicated to improving the 
lives of young children and their families in San 
Francisco, which is housed in the offices of the 
Department of Children, Youth and Their Families. 
Currently, Mr. Yap advises that the Department 
has approximately 27 full-time equivalent staff and 
the Starting Points Initiative has five staff 
positions, for a total of approximately 32 staff, an 
increase of 60 percent over the last five years. In 
addition, Mr. Yap notes that four youth interns 
periodically work in their offices and the 
Department will be requesting up to two additional 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to Finance and Labor Commiti >■<■ 

December 1, 1999 Finance and Labor Committee Meeting 



full-time staff positions in the coming fiscal year. 
The significant growth in the number of staff over 
the past five years, coupled with some anticipated 
growth over the next five years necessitates the 
need for the additional space, according to Mr. Yap. 

3. In addition, Mr. Yap advises that the Board of 
Supervisors established the California Children 
and Families First Trust Funds, with Proposition 
10 monies from the increased State surtax on 
cigarettes and other tobacco products (Ordinance 
409-98). Mr. Yap reports that one Executive 
Director position for the California Children and 
Families First Trust Funds is to be hired 
immediately, to be located within the newly leased 
offices. Furthermore, an administrative assistant is 
likely to be hired in May of 2000 from these Trust 
Funds, who also would be located in the newly 
leased space, according to Mr. Yap and once the 
Proposition 10 funds of approximately $6 million 
are released in May of 2000, additional staff may 
also be added. Additionally, one staff person is 
assigned to the Childcare Policy Advisory 
Committee (CPAC). 

4. In 1998, the Board of Supervisors transferred 
administrative oversight for the Delinquency 
Prevention Commission (DPC) to DCYF 
(Resolution 717-98). Mr. Yap advises that the DPC 
currently has two full-time equivalent staff 
positions. Therefore, in total, the proposed lease 
space would need to accommodate approximately 
37 staff (27 from DCYF + 5 from Starting Points 
Initiative + 2 from California Children and 
Families First Trust Funds + 2 from DPC + 1 from 
CPAC). Based on the total proposed 7.237 square 
feet of space and the anticipated 37 staff positions 
results in an average of approximately 196 square 
feet per staffperson. According to Mr. Dunn, the 
Real Estate Department's guidelines are for 
approximately 175 to 250 square feet per person. 
Mr. Yap notes that the DCYF also employs youth 
interns and anticipates hiring of additional staff in 
the coming years, who would need to be 
accommodated in the same space. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

38 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



5. Mr. Yap advises that the proposed Suite 925 to 
be leased is located in between Suites 918 and 924 
where the DCYF is located and Suite 901, where 
the DPC is located. Therefore, Mr. Yap reports that 
expanding the administrative offices to incorporate 
Suite 925 will interconnect the DCYF with both the 
DPC and the California Children and Families 
First Trust Fund offices to allow for direct staff 
oversight by DCYF and more flexible and efficient 
use of all the space. For example, Mr. Yap notes 
that the DPC has a Commission room that would 
be available for use for conference and meeting 
rooms for the other staff. 

6. Mr. Yap advises that under the new lease 
provisions, there will be only one lease between 
CalFox and the DCYF. The current lease between 
CalFox and the Delinquency Prevention 
Commission will be assumed under these new lease 
provisions. As a result, Mr. Yap reports that the 
DPC will pay the DCYF for the DPC's use of space 
and the DCYF will handle all of the administrative 
responsibilities for the DPC. 

7. As noted above, the proposed new lease 
arrangements will result in an increase in the 
annual cost per square foot from $16.82 for the 
Department of Children, Youth and their Families 
(DCYF) and $17.68 for the Delinquency Prevention 
Commission (DPC) to $30 per square foot, 
beginning in December of 2000. This represents an 
increase of 78 percent for DCYF and 70 percent for 
DPC, or an overall increase of 72 percent. However, 
Mr. Dunn reports that the proposed new lease 
terms represent the current fair market rents for 
the proposed space. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

39 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Item 8 -File 99-2120 

Department: 

Item: 



Location: 
Term of Permit: 

Permit Fee: 
Description: 



Comments: 



Department of Real Estate (DPJ3) 

Resolution authorizing the issuance of a permit to 
Delancey Street Foundation for use of City-owned 
property at 2350 19 th Avenue, under the jurisdiction of 
the Fire Department. 



2350 19 th Avenue 



November 15, 
weeks) 

$7,500 



1999 through December 25, 1999 (six 



The proposed resolution would authorize the Department 
of Real Estate (DRE) to issue a six-week permit to 
Delancey Street Foundation, a nonprofit organization, to 
use 12,000 square feet of a vacant lot and shed space at 
2350 19 th Avenue, for the sale of Christmas trees and 
related decorations. 

1. According to Mr. Harry Quinn of DRE, in November of 
1999, the Board of Supervisors approved a resolution, 
authorizing DRE to grant a six-month option to the San 
Francisco Neighborhood Resource Center, a nonprofit 
agency, for that agency to lease the subject property to 
provide information and referral services to the Chinese- 
speaking residents of the Sunset District (File 99-2006). 
Mr. Quinn states that the six-month option included the 
subject shed and lot space, as well as 500 square feet of 
office space. Because the San Francisco Neighborhood 
Resource Center does not intend to exercise its option to 
lease the subject property during the period from 
November 15, 1999, through December 25, 1999. DRE is 
seeking authorization to issue a permit to Delancey Street 
for use of the vacant shed and lot space. 

2. Mr. Quinn states that the $7,500 permit fee, payable by 
Delancey Street Foundation to the City, to cover use of 
the property and the City's related administrative costs 
represents fair market value for the six-week permit, 
based on a monthly rent of $5,000. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



40 



Memo to Finance and Labor Commit; 

December 1, 1999 Finance and Labor Committee Meeting 

3. The term of the permit commenced on November 15, 
1999, and therefore, the resolution should be amended to 
provide for retroactivity. 

4. Because DRE authorized the Delancey Street 
Foundation to begin selling Christmas trees and related 
decorations at the subject property as of November 15, 
1999, the commencement date of the proposed permit 
authorization, prior to obtaining Board of Supervisors 
approval, the Budget Analyst considers this resolution to 
be a policy decision. 

Recommendations: 1. Amend the resolution to provide for retroactivity. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

41 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Item 9 - 99-1859 

Note: This item was continue by the Finance and labor Committee at its meeting 
of October 20, 1999. 



Departments: 



Item: 



Location: 

Owner and 
Seller: 

Size of Lots: 



Department of Public Works (DPW) 
Public Utilities Commission (PUC) 
Real Estate Department (DRE) 

Resolution authorizing the acquisition by the City of Lots 
3 and 4 in Assessor's Block 4501 to permit the Public 
Utilities Commission (PUC) to expand the Southeast 
Water Pollution Control Plant Booster Pump Station, and 
adopting findings pursuant to City Planning Code Section 
101.1. 

Assessor's Block 4501, Lots 3 and 4, bounded by Third 
Street, Arthur Avenue, and Islais Creek 

Fee Properties II, a California partnership 

In combination, Lots 3 and 4 total approximately 2,982 
square feet of land area. 



Purchase Price 

to be Paid by the City: $250,000 plus an estimated $5,000 in title insurance and 

standard closing costs, for a total estimated cost to the 

City of $255,000 



Source of Funds: 



Clean Water Program 1988B Sewer Revenue Bonds 



Description: 



The proposed resolution would authorize the acquisition 
by the City of Assessor's Block 4501, Lots 3 and 4 (the 
"subject propert} 7 "), from Fee Properties II, a California 
partnership. The subject property consists of 2,982 
square feet of vacant land and is bounded by Third Street, 
Arthur Avenue, and Islais Creek. The purchase price 
would be $250,000, plus an estimated $5,000 for title 
insurance and standard closing costs, resulting in a total 
estimated cost to the City of $255,000. The acquisition of 
the 2,982 square foot property would enable the PUC to 
expand the Southeast Water Pollution Control Plant 
Booster Pump Station by 2.287 square feet from 1,232 
square feet to 3,519 square feet. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

42 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

In his letter of April 8, 1999 to the PUC, the Director of 
Planning stated that the proposed expansion of the 
Southeast Water Pollution Control Plant Booster Pump 
Station would be (a) in conformity with the City's General 
Plan, (b) exempt from Environmental Review under Class 
1 of the California Environmental Quality Act, and (c) 
consistent with the Eight Priority Policies of City 
Planning Code Section 101.1. 

Comments: 1. According to Mr. Jonathan Loiacono, Manager of 

Engineering for the PUC's Water Pollution Control 
Division, the existing Southeast Water Pollution Control 
Plant Booster Pump Station located in Assessor's Block 
4501, Lot 1, at Third Street and Arthur Avenue cannot 
discharge more than 95 million gallons per day m dry 
weather without risking an overflow into Islais Creek 
which would be in violation of the Regional Water Quality 
Control Board's requirements. To avoid such violations, 
since 1988 the PUC has used an upstream pump station 
to store sewage at peak times, which causes odor 
problems for the area around that upstream pump 
station. Mr. Loiacono states that, in order to preclude 
potential future violations of the Regional Water Quality 
Control Board's permit requirements, the PUC has 
deemed it necessary to expand the Southeast Water 
Pollution Control Plant Booster Pump Station (Resolution 
99-0116) and install new equipment at an estimated cost 
of $10,000,000 from Clean Water Program 1988B Sewer 
Revenue Bonds. Mr. Loiacono states that upgrading the 
existing equipment would (a) enable the Southeast Water 
Pollution Control Plant Booster Pump Station to cope 
with a peak discharge flow of 110 million gallons per day, 

(b) avoid the need to store sewage at an upstream pump 
station, thereby avoiding odor problems at that location. 

(c) replace approximately 12 year old mechanical and 
electrical equipment that is now at the end of its useful 
life, and (d) increase the Pump Station's reliability by 
providing a backup pump mechanism in the event of a 
failure. Attachments I and II are memoranda prepared 
by Mr. LoiLcono which further explain the need to expand 
and upgrade the Pump Station. 

2. The subject property's purchase price of S250.000 
would be funded by Clean Water Program 1988B Sewer 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

A3 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Ptevenue Bonds. According to Mr. Carlos Jacobo of the 
PUC, acquisition of this property would be funded from 
the S 10,000,000 budget appropriated by the Board of 
Supervisors from Clean Water Program 199SB Sewer 
Revenue Bonds for the expansion and upgrading of the 
Southeast Water Pollution Control Plant Booster Pump 
Station. As contained in the relevant budget documents, 
$6,900,000 was appropriated for this project under the 
Clean Water Enterprise 1998-99 Capital Improvement 
Projects, and $3,100,000 was appropriated for this project 
under the Clean Water Enterprise 1999-2000 Capital 
Improvement Projects. 

3. Mr. Steve Hoppe of the DRE states that the DRE 
prepared an appraisal for the subject property which 
determined that the purchase price of $250,000, or 
approximately $83.84 per square foot ($250,000 divided 
by the 2,982 square feet of the subject property), 
represents fair market value. The owner of the subject 
property agreed to this price and a property acquisition 
agreement was finalized on November 4, 1999. 

4. The property acquisition agreement between the City 
and Fee Properties II would require the City to (a) defend 
all actions filed against Fee Properties II related to 
environmental conditions on the subject property, (b) 
release and indemnify Fee Properties II against claims 
related to environmental conditions on the propert} 7 in an 
amount not to exceed $250,000, and (c) reimburse any 
legal defense costs incurred by Fee Properties II. Mr. 
Hoppe states that such an indemnification provision is 
unusual and has been included in the pending property 
acquisition agreement at the insistence of the partners of 
Fee Properties II, Mr. Sherman Little and Ms. Lynn 
Schilling. According to Mr. Hoppe, Fee Properties II has 
had an ownership interest in the subject vacant land since 
1992 and has not used the property for industrial 
purposes. 

Based on the information provided by the DRE about the 
use of the property by Fee Properties II, Ms. Rona Sandler 
and Mr. Charles Sullivan of the City Attorney's Office 
state that, while a future litigant might sue all previous 
owners of the property and the City in a lawsuit related to 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

environmental conditions on the subject property or 
adjacent properties, it is unlikely that Fee Properties II 
would be found to have contributed to the subject 
property's environmental condition. Ms. Sandler and Mr. 
Sullivan state that the City has agreed to indemnify Fee 
Properties II for (a) up to $250,000 for any liability they 
might incur as a result of the condition of the prop 
and (b) the additional cost of any legal defense costs 
incurred by the Fee Properties II. 

5. According to Mr. Stan Desouza of the DPW, soil 
testing for a light rail project, which was completed in 
October of 1998 on Third Street, along the east side of the 
subject property, has not indicated any unexpected 
environmental conditions. .Although DPW has not yet 
conducted any environmental investigation or testing on 
the subject property, DPW already knows that the subject 
property occupies historic fill land which contains 2.000 
cubic yards of soil which will have to be disposed of in a 
Class 1 disposal facility because of lead contamination. 
Based on DPWs soil testing of adjacent land. Mr. 
DeSouza states that DPW does not anticipate unexpected 
environmental conditions on the subject property. 

6. Attachment III is a memorandum from Mr. Hoppe 
explaining why the City should indemnify Fee Properties 
II for claims of up to $250,000 when, according to the 
DRE, such an indemnification provision is not normally 
included in property acquisition agreements entered into 
by the City. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

45 



■kg 



Jler Caen 

r 

. Cook 

vcen: 

lis NormanCy 

i. Makras 

on 



Attachment I 
?aae 1 of 2 



City and County of San Francisco 

Public Utilities Commission 
Water Pollution Control Division 

Willie L Browr., Jr., flavor 
Anson 3. Moran. 3er,era! Manager 



. San Francisco 
Ciean Water Program 



San Franc:sco 
Water Department 



Hetch Hetcny 
Water And Power 



MEMORANDUM 



TO : Mike Quan 

Manager. ?UC UEB 

FROM -Syjor. Loiacono 

^ Manager. WPCD Engineering 



DATE 



FILE 



Julv 26. 1S99 



Cap Proj:JO:BPS 



SUBJECT : Rationale for Current Sr-WPCD Booster Pump Station Design and need to acquire 
Adjacent Private Property - PUC Contract No. CW-227 

The Southeast Water Pollution Control Plant Booster Pomp Station (BPS) pumps effluent sewage 
from the Southeast Plant (SEP) into the San Francisco Bay. The existing pump station is old and 
currently can not pump the flowrate required to meet SEP's peak wet weather permit conditions 
nor the peak diurnal flowrate during dry weather, in addition, there is no redundant pumping 
capacity-. If a pump fails during a wet weather event, the 3PS flowrate will be reduced bv one 
third. If a pump fails during dry weather, more sewage will need to be stored upstream of 
Channel Pump Station. The storage of sewage upstream of Channel Pump Station causes odors 
to emanate in the Mission Bay and South of Market area. Hence, the need to expand the pump 
station. 

SUMMARY OF SITE SELECTION PROCESS 

Tne BPS project was initiated in 1997. The need for the project is described above. There were 
limited funds available for this project. Ultimately about ten million dollars was allocated for this 
project. 

The funding restrictions and system site limitations required that we consider expansion of the 
existing 3PS as opposed to constructing a new pump station and connection into the existing 
San Francisco Bay Outfall somewhere else on available City Property. Tne system site limitation 
is where the BPS connects to the Islais Creek Underwater Crossing which connects to the 
existing San Francisco Bay Outfall. It will be useful if the enclosed drawing is referred to for the 
descriptions of alternatives. 

Tne existing BPS discharge header runs from east to west and connects into the Underwater 
Crossing at the Westerly end. 

We evaluated five options prior to the selected option, that were within the confines of the City's 
Lot 1 and 5 as shown on the drawing. Tne fifth option required a sump built up to the property 
line of Lot 4. None of these five options however could be built and meet tht Regional Water 
Quality Control Boards (RWQC3) restriction that the City wouic oniy be allowed three. 7 cay 
shut downs during construction (see background below). None of the first five options had space 
to accommodate the electrical dr.ves and switch gear, and allow ease of access for maintenance. 

The RWQC3 requirement for iimited shutdowns necessitated that we build two new sumps, 
pumps, all related aDDurtenances. and electrical equipment, pnor to work within the existing 
pump station structure. The new sumps, pumps and etc. needed to be connected to the existing 
discharge header and fullv operational before work could commence within the existing pump 
station. 



Southeast 



50 =neios Street - San Francscc. Caiifooiu 9-»12£-21ol • (-M5i 6-sS-SflS2 • z ax f*l51 550-9316 



Page 'I or 2~ 

The final design Incorporated four pumps and sumps and can meet our flowrate conditions with 
only three pumps operational. 

Expansion into the west portion of Lot 1 is deemed to be technically infeasible due to the 
configuration of the Islais Creek Underwater Crossing connection: and the need for more space to 
house the electrical equipment and other appurtenances, than is available. 

The existing layout and expansion into private property was not taken lightly and without serious 
consideration. Tnere were many constraints on this project that have been described that led to 
the final layout. Engineering also discussed and has been working with the PtiC Land 
Management Section and Real Estate since late 1997 regarding acquisition of this property. We 
believe that for the reasons stated above that this project is a public necessity. 

As a final note, this design has been worked out with many groups which include the Bay 
Conservation and Development Commission. City Planning. The Friends of Islais Creek and the 
Regional Water Quality Board. 

BACKGROUND 

The pump station was originally built in the 1960's. Two pumps pumped an average flow of 20 
million gallons per day (MGD) and a peak flow of 70 MGD. The pump station was modified in the 
1980s and currently three pumps pump an average of 70 MGD and a peakflow of 95 MGD. 

Two events occurred in the 1990s that led to the need for the Clean Water Program to upgrade 
the pump station. 

1. The total peak treatment capacity at SEWPCP was increased to 250 MGD of which the wet 
weather primary only treatment peak capacity was increased to 1 10 MGD and the 
secondary treatment peak capacity remained at 140 MGD. Tne Regional Water Quality 
Control Board CRWQCB) permit for the Southeast Water Pollution Control Plant mandates 
that all wet weather primary treatment effluent up to 1 10 MGD be pumped into San 
Francisco Bay Outfall near Pier SO during wet weather: and all secondary plant effluent 
must be pumped to the bay outfall during dry weather. The dry weather flow averages 70 
MGD and the diurnal peak is slightly over 100 MGD. 

2. The RWQCB had a document prepared entitled "Wastewater Pumping Station Reliability 
Recommendations" dated 11/7/96. The recommendation included redundant pumps to 
ensure reliability. 

Furthermore, the age of some of the systems in the pump station that could fail, leaves the pump 
station vulnerable to a shut down of all pumps. 

Because the Booster Pump Station currently cannot fully meet these RWQCB permit 
requirements, this project was initiated in 1997 to expand the pump station capacity to 1 10 MGD 
with three pumps running and one on standby. The project requires an expansion of the pump 
station building structure to install additional sumps to house the new pumps. A Clean Water 
Program bond fund budget of about ten million dollars (S10M) was allocated for this project. In 
order to construct the required improvements, the RWQCB has granted the PUC a waiver of try 
weather discharge to Islais Creek to shut down the pump station of a week a; a time or. three 
occasions during construction. 

We would like the opportunity to meet with you to go over this project with the drawing and a: 
"he site. A delay of this project at this time will be a minimum of one year and increase the risk 
of a pump or pump station failure. 

JL/ee 



p^ 



Attachment II 
Page I or 2 



Booster Pump Station Upgrade Funding Justification 



The Southeast Water Pollution Control Plant (SEWPCP) of the City and County 
of San Francisco presently discharges an average dry weather flow of 67 million 
gallons per day (MGD). Tne peak secondary treatment capacity is 150 MGD. 
SEWPCP treats domestic and industrial wastewater from the Southeast and 
North Shore areas of San Francisco, the Bayshore Sanitary District, and a small 
part of the North San Mateo County Sanitation District. The plant serves a 
combined sewer system. Treated wastewater of up to 100 MGD is pumped into 
a deep water outfall through pier 80 to the northern portion of San Francisco Bay 
approximately 810 feet from shore and 42 feet below the mean lower low water 
level where the initial dilution exceeds 10:1. 

Following the completion of the Rankin Pump Station and Southeast Water 
Pollution Control Plant Improvements project in April 1997, SEWPCP can 
provide an additional 100 MGD of primary-only treatment during wet weather 
for a total wet weather treatment capacity of up to 250 MGD. The effluent flow 
in excess of 100 MGD is discharged into Islais Creek through the Quint Street 
Outfall where the initial dilution is less than 10:1. 

The Regional Water Quality Control Board (RWQCB), San Francisco Bay Region, 
adopted a revised Water Quality Control Plan for the San Francisco Bay Basin 
(Basin Plan) on December 17,1986 and amended it on September 16,1992, which 
was approved by the State Board on April 27,1993. The Basin Plan prohibits 
waste discharges to surface waters where less than 10:1 initial dilution is 
achieved, except the wet weather discharges into Islais Creek is still allowed, as 
long as they are consistent with the RWQCB's Cease and Desist Order and its 
amendments. 

To comply with the RWQCB's order #91-153 which allows only secondary 
effluent with adequate disinfection to be discharged to Islais Creek during wet 
weather; and to comply with the RWQCB's Cease and Desist Order #79-67 which 
requires the SEWPCP capacity be increased to 250 MGD to lower the number of 
overflows in the Islais Creek to ten overflows per year, the City and County of 
San Francisco initiated the SEWPCP plant improvements project in late 1990. 
The construction started in January 1994 and was completed in April 1997. The 
project cost total $105 million. 

The limited capacity of the Booster Pump Station was not addressed in the 
SEWPCP Improvements project. The maximum capacity could reach 100 MGD 
with the present three Johnston Vertical Pumps. However, only about 90 MGD 
can be reliably delivered to the Pier 80 outfall. After the SEWPCP improvements 
project, the primary-only treatment capacity was increased to 100 MGD. All of 



Attachraer.'- II 
Page 2 of 2 



this flow must be pumped to the Pier 80 outfall because only secondary effluent 
is allowed to overflow into Islais Creek during wet weather. The present Booster 
Pump Station can not reliably accomplish this task. In addition, the Islais Creek 
Storage Box will be put online during wet weather. More flow will come into the 
plant for treatment. This requires all three booster pumps to work at peak flow 
conditions for about 20% more rime without any backup pump as shown in the 
following table. If one pump breaks down, the Booster Pump Station will not be 
able to deliver the required flow, risking violations of the NPDES discharge 
permit. The plant flow will also need to be reduced, causing underutilization of 
the full capacity of the plant. 





Peak Booster Pump Station Flow 


90 MGD 


100 MGD 


Peak Plant Flow 


Hours of Pump Peak Operation 


210 MGD 


638 


616 


250 MGD (Islais Creek 
Storage Box Online) 


760 


740 


Percent Increase 


19.1% 


20.1% 


Note: the numbers are provided bv a Hydrologist contracted with the Cil 



To prevent the problems listed above from happening, a reliable total capacity of 
110 MGD for the Booster Pump Station is needed at all times. The Wastewater 
Pumping Station Reliability Recommendations prepared for the the California 
RWQCB, San Francisco Bay Region in October 1996 by Black and Veatch 
recommended that the firm pumping capacity of a pumping station, which is the 
sum of the capacity of the pumping units that can be operated together with the 
largest pumping unit out of service, should equal or exceed the maximum 
anticipated design flow, which in our case is 110 MGD. This redundancy is 
necessary to ensure a continuous and reliable pumping station operation to 
prevent wastewater overflows or spills. 

The study by WPCD Environmental Engineering suggested that the required 
booster pump station reliability and redundancy could be accomplished by 
modifying the existing booster pump station. Three old Johnston 
Vertical Pumps would be replaced with four Fairbanks Morse Vertical Turbine 
Solids-Handling Pumps. It is requested that the funding for this upgrading work 
be provided from the restricted bond money. 



49 



OCT-15-1999 15=47 



CCSF REAL ESTPTE DEPT 



City and County of San Francisco 




415 552 S216 P. 03/03 

Attachment III 

Real Estate Department 

Offica of the 
Director of Property 



Memorandum 



to: 



Alan Gibson 

Budget Analyst' Office 



Through: 



From: 



Date: 



Harry Quinn 
Assistant Dire 
Anthony J. DeLucchi 
Director of Property 

Steve Hoppe 

Real Property Officer 

October 15, 1999 




Subject: 3 rd and Arthur Streets acquisition for Pump Station Expansion 

The subject property is the only property suitable for the proposed pump station 
expansion (the "Project"). The seller insists on the release and indemnification 
language or he will not sell voluntarily. The PUC has indicated it does not want 
to acquire property through the eminent domain process. Therefore, if the City 
wants to purchase this property, it must accept the seller's release and indemnity 
language. 

As a practical matter, the City will be subject to possibly substantial fines if the 
Project is not built, so any expense, however probable or improbable, would have 
to be weighed against the much more certain fines. 

Please call me if you have any questions. 



Sh:h:'51 02\memo to Alan GlbtooAx 



554-0850 
FAX:ES2-*?16 



25 Van N«*s Avwiue. Suit* 400 



San Franclaco, M1C2 

TOTftL P. (33 



50 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Item 11 - File 99-2024 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Budget: 






Committee on Information Technology (COIT) 

Hearing to consider the release of funds previously 
reserved in the FY 1999-2000 budget in the amount of 
$1,125,000 for the Committee on Information Technology's 
(COIT) Year 2000 Project Management Office. 

$1,125,000 

General Fund Reserve 

During the FY 1999-2000 budget process, the Board of 
Supervisors appropriated $2,250,000 for the Committee on 
Information Technology's (COIT) Year 2000 Project 
Management Office, placing $1,125,000 on reserve. COIT 
is now requesting that the $1,125,000 be released from 
reserve. 

Ms. Patty Fado, Director of the Year 2000 Project 
Management Office, advises that the Office provides 
services to coordinate and assist City departments with 
planning, assessment, and remediation of Year 2000- 
related computer problems. The requested $1,125,000 
release of reserves would fund the final stage of this 
project, through April 7, 2000. Ms. Fado reports that the 
reason funding is required through April 7, 2000 is 
because the Year 2000 is a leap year, a fact overlooked by 
many system and equipment manufacturers. As a result, 
Ms. Fado advises that the City's equipment and systems 
must be tested and adjusted to account for the leap year's 
extra day (February 29). 

Attachment I, provided by the Year 2000 Project 
Management Office, contains a budget for the total 
$2,250,000 appropriated by the Board of Supervisors for 
the Year 2000 Project in the FY 1999-2000 budget, 
including this subject $1,250,000 which was placed on 
reserve. As shown on Attachment I, $1,145,253 of the 
$2,250,000 has been expended to date, leaving a balance of 
$1,104,747 in unexpended funds. Therefore $20,253 of the 
requested of $1,125,000 has already been expended prior 
to obtaining approved release of the reserved monies from 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

51 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

the Board of Supervisors. An additional $630,148 has been 
encumbered for work which has begun and, in some cases, 
has already been completed. Therefore COIT has expended 
and encumbered $650,401 of this requested release of 
$1,125,000 without first obtaining Board of Supervisors 
approval for the funds to be released. Finally, COIT is 
requesting the balance of $474,599 to fund the remainder 
of the project. Attachment II, provided by Ms. Fado, is a 
description and budget details for the $650,401 of already 
encumbered funds and the $474,599 in Year 2000 Project 
work remaining to be completed. 

In summary, COIT is now requesting the subject 
$1,125,000 release of reserves for previous expenditures 
($20,253), encumbered expenditures ($630,148), and to 
fund the remaining Year 2000 Project work ($474,599) 
through March 2000. 

Comment: 1. The Board of Supervisors previously appropriated 

$500,000 in both FY 1997-1998 and 1998-1999, for a total 
of $1,000,000. for Year 2000 compliance expenditures. 
These appropriations included expenditures for the City's 
payroll system ($247,000), the Health Services System 
($186,000), the Mayor's Emergency Telephone System 
($65,000), the Court Management System ($126,000), a 
contract to assess the City's exposure to non-compliant 
micro-chips in vehicles, elevators, medical equipment and 
other devices ($25,000) and various smaller projects 
($351,000). In January of 1999, the Board of Supervisors 
appropriated funds to create the Year 2000 Project 
Management Office team to provide technical assistance, 
monitoring, testing and implementation of Year 2000 
compliance requirements ($979,000). In April 1999 the 
Board of Supervisors appropriated funds for the 
replacement of the Department of Building Inspection's 
network equipment, upgrading of software and hardware, 
and integration of the Department's Permit Tracking and 
Issuance System ($1,490,724) and to the Department of 
City Planning for new Year 2000 compliant equipment, 
software and upgrades ($491,530). In May 1999 the Board 
of Supervisors appropriated funds to the Public Utilities 
Commission for the establishment and implementation of 
a Year 2000 embedded system compliance program 
($1,020,700). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

52 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Finally, the Board of Supervisors appropriated a total of 
$3,928,469 in the FY 1999-2000 budget including 
$2,250,000 to support the subject Year 2000 Project 
Management Office (placing the subject $1,125,000 on 
reserve) and $1,678,469 in Year 2000 related equipment 
replacement for the Treasurer/Tax Collector and the 
Department of Public Health's medical records systems. 
Therefore, to date, a total of $8,910,423 has been 
appropriated for Year 2000 compliance expenditures. 

The table below summarizes total Year 2000 compliance 
expenditures to date: 

Fiscal Year 1997-1998 and 1998-1999 

Expenditures $1,000,000 

January 1999 Supplemental Appropriation 

(File 98-2130) 979.000 

April 1999 Supplemental Appropriation 

(File 99-0667) 1,490,724 

April 1999 Supplemental Appropriation 

(File 99-0668) 491,530 

May 1999 Supplemental Appropriation 

"(File 99-0870) 1,020,700 

Fiscal Year 1999-2000 Budget Appropriation 3.928.469 * 
Total to date $8,910,423 

'Includes this requested release of reserved funds of $1,125,000. 



Recommendation: COIT has expended and encumbered a total of $650,401 

of this requested release of reserved funds of $1,125,000 
without first obtaining Board of Supervisors approval for 
the funds to be released. Therefore the Budget Analyst 
considers approval of the requested release of reserved 
funds to be a policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

53 



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56 



Memo to Finance and Labor Committee 

December 1. 1999 Finance and Labor Committee Meeting 

Item 12-99-2121 



Department: 
Item: 



Department of Human Services (DHS) 

Resolution authorizing the Executive Director of the 
Department of Human Services to execute the necessary 
agreements for San Francisco's participation in a project, 
involving a consortium of eighteen (18) Counties, to 
develop and implement a computer system to administer 
public benefit programs, such as CalWORKs and Food 
Stamps, in accordance with State's Welfare and 
Institutions Code. 



Description: 



Currently, Sections 10823 and 10824 of the State's 
Welfare and Institutions Code require Counties to (a) use 
computer systems to administer public benefit programs 
such as CalWORKs and Food Stamps and (b) form 
consortia to develop and implement such computer 
systems. San Francisco is presently a member of the 
Welfare Client Data System (WCDS), a consortium of 
eighteen (18) California counties, which has shared 
maintenance of the welfare computer system known as 
WCDS since approximately 1969. 

Attachment I, provided by the Department of Human 
Sendees (DHS), contains a list of the eighteen (18) 
Counties in the WCDS Consortium. 

Ms. Sally Kipper of the DHS reports that the existing 
Welfare Client Data S3 r stem currently administers nine 
(9) public benefit programs to over 2 million welfare 
clients annually which represents approximately 40 
percent of the client caseload in the State each year. 

According to Ms. Kipper, in order to sustain its current 
annual caseload of 2 million clients and meet new Federal 
Welfare Reform case management, reporting and 
evaluation requirements, the Welfare Client Data 
System, a consortium of 18 Counties, must replace the 
computer system with a new system known as the 
CalWORKs Information Network (CalWIN) system. Ms. 
Kipper states that the existing WCDS computer system is 
not equipped to provide case management, reporting and 
evaluation tools as required by new Federal Welfare 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Reform laws. According to Ms. Kipper, the Welfare Client 
Data System cannot be practically modified to provide 
such tools. 

Attachment II, provided by Ms. Kipper, compares the 
functions of the existing WCDS computer system with 
those of the new proposed CalWIN computer system. 

Attachment III. provided by Ms. Kipper, contains the 
budget details, including all funding sources, for the total 
project costs of $471,581,024 over the nine-year period 
from FY 1999-2000 through FY 2007-2008. 

Attachment IV. provided by Ms. Kipper, shows a list of 
each of the eighteen (18) Counties, including their share 
of the total project costs of $471,581,024. As shown in 
Attachment IV, San Francisco's share of the costs for the 
CalWIN project is $29,419,528, including $2,997,861 in 
General Fund costs. 

Attachment V, provided by Ms. Kipper, contains San 
Francisco's payment schedule, totaling $29,419,528, over 
the nine-year period of the CalWIN project. Attachment 
V shows that San Francisco's costs of $29,419,528 for the 
CalWIN project is $2,997,861 from the General Fund with 
the balance of $26,421,667 to be funded from $11,127,299 
in State grants and $15,294,368 in Federal grants. 

Attachment VI. provided by Ms. Kipper, shows that San 
Francisco's General Fund costs of $2,997,861 for the 
CalWIN project include (a) one-time costs of $1,116,935 to 
develop a computer program application for the General 
Assistance (GA) public benefit program and $150,850 to 
develop similar applications for the other public benefit 
programs and (b) on-going costs, totaling SI. 730. 076. to 
maintain and operate the CalWORKs Information 
Network over the nine-year period from FY* 1999-2000 
through FY" 2007-200S. 

Attachment VII, provided by Ms. Kipper, compares San 
Francisco's share of FY 1999-2000 General Fund costs to 
maintain and operate the existing WCDS computer 
system with an estimate of on-going annual General Fund 
costs to operate and maintain the new proposed CalWIN 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

58 



Memo to Finance and Labor Committee 

December 1. 1999 Finance and Labor Committee Meeting 



computer system. As shown in Attachment VII, with 
implementation of the CalWIN computer system, San 
Francisco's share of on-going annual General Fund costs 
to maintain and operate the CalWORKs Information 
Network would decrease by $418,136 from $842,326 to 
8424,190. Ms. Kipper reports that this $418,136 decrease 
in on-going annual General Fund costs is primarily 
attributable to the fact that Mainframe Costs associated 
with the existing WCDS computer system would no longer 
be required under the new proposed CalWIN system. In 
Attachment VII, Ms. Kipper explains that "The new 
system will be maintained on a central server by the 
contractor, and the costs will be shared by the 18 
Counties. The current system requires each of the 
Counties to separately customize, install and maintain 
the software on their own mainframes." 

According to Ms. Kipper, in December of 1997, the WCDS 
Consortium issued a Request for Proposals (RFP) to 
develop and implement the new proposed CalWORKs 
Information Network computer system. As shown in 
Attachment III, of the total project costs of $471,581,024, 
the WCDS Consortium intends to award a contract in the 
amount of $257,033,211 to the EDS Corporation, a private 
firm, and their partners, Deliotte & Touche Consulting 
and Unisjrs Corporation, for the development and 
implementation of the CalWIN computer system. 

Attachment VIII, provided by Ms. Kipper, summarizes 
the RFP process used by the WCDS Consortium to 
identify a contractor for the CalWIN project and explains 
why the EDS Corporation was the only firm that 
submitted a proposal for the proposed project. 

Ms. Kipper advises that if San Francisco does not 
maintain its participation in the Welfare Ghent Data 
System Consortium, the existing Welfare Client Data 
System will not be available to San Francisco once it is 
replaced by the new proposed CalWORKs Information 
Network and as such, San Francisco would risk the loss of 
State and Federal funding for public benefit programs. 

Approval of the proposed resolution would (a) authorize 
the Department of Human Services to continue San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Francisco's membership in the Welfare Client Data 
System Consortium and (b) authorize the Executive- 
Director of the Department of Human Services to execute 
the necessary agreements for San Francisco's 
participation in the proposed project, including a system 
contract of $257,033,211, to be paid for by all 18 Counties 
in the Welfare Client Data System Consortium, with the 
EDS Corporation for the development and 
implementation of the new proposed CalWIN computer 
system and any other agreements for the maintenance 
and operation of the CalWOPJvs Information Network. 

Comments: 1. The title of the proposed resolution states that the 

Executive Director of the Department of Human Services 
would be authorized to enter into an agreement with a 
consortium of 18 Counties to develop and implement a 
computer system to administer public benefit programs. 
However, Ms. Kipper states that the title of the proposed 
resolution should state that the Executive Director would 
be authorized to execute the necessary agreements for 
San Francisco's participation in the proposed project, 
involving a consortium of 18 Counties, to develop and 
implement a computer system to administer public 
benefit programs. 

2. The proposed resolution contains a provision that 
would authorize the Department of Human Services to 
continue San Francisco's membership in the Welfare 
Client Data System Consortium. However, this provision 
is not included in the title of the proposed resolution. Mr. 
Lakey states that such provision was inadvertently 
omitted from the title. 

3. Attachment M shows that in FY 1999-2000, San 
Francisco's share of General Fund costs for the proposed 
project totals 575,511 which is included in DHS's FY 
1999-2000 budget, according to Ms. Kipper. 

4. In the Notes Section of Attachment MI, Ms. Kipper 
explains that currently the WCDS Consortium maintains 
an existing contract, totaling 55,656.800 in FY 1999-2000, 
with the EDS Corporation for the EDS Corporation to 
operate and maintain the existing WCDS computer 
system. This contract between the 18 Counties in the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Welfare Client Data System Consortium and the EDS 
Corporation was previously approved by the Board of 
Supervisors, according to Ms. Kipper. Ms. Kipper states 
that in FY 1999-2000, San Francisco's share of costs for 
this contract is $406,698, including 5142,344 from the 
General Fund with the balance of $264,354 to be funded 
from $101,675 in State grants and $162,679 in Federal 
grants. In Attachment VII, Ms. Kipper states that "The 
consortium will have to maintain this contract (and the 
County will have to maintain DTIS support) until all 
counties in the consortium have migrated to the new- 
system in the 2003/2004 fiscal year." 

5. The Committee on Information Technology (COIT) 
approved the CalWIN project in May of 1999. 

Recommendations: 1. Amend the title of the proposed resolution to state that 

(a) the Executive Director of the Department of Human 
Services would be authorized to execute the necessary 
agreements for San Francisco's participation in the 
proposed project, involving a consortium of 18 Counties, to 
develop and implement a computer system to administer 
public benefit programs and (b) amend the resolution to 
include a provision that would authorize the Department 
of Human Services to continue San Francisco's 
membership m the Welfare Client Data System 
Consortium. 

2. Approve the proposed resolution as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

61 



Attachment I 



Welfare Client Data System Consortium 
Counties 

1. Alameda 7. San Diego 13. Santa Cruz 

2. Contra Costa S. San Francisco 14. Solano 

3. Fresno 9. San Luis Obispo 15. Sonoma 

4. Orange 10. San Mateo 16. Tulare 

5 . Placer 1 1 . Santa Barbara 1 7. Ventura 

6. Sacramento 12. Santa Clara IS. Yolo 



62 



Attachment II 



Comparison of Current and Proposed Systems 
11/99 



Issue 


Current System Proposed System 
WCDS CalWIN 


Ease if Use 


Written in Cobal II. Code driven: workers 
must memorize lists of code options to fill 
in manv cells. 


Windows environment. Menu-driven, 
logical entry options, on-line help screens. 


System 
maintenance 


30-yr old system, not capable of significant 
modification. The code is maintained and 
upgraded by the vendor and shipped to the 
member counties. Each of them 
customizes it for their individual needs (a 
cumbersome redundant process) and runs 
it on their own mainframes. Legislative 
and state policy changes require upgrades 
several times per year. 


Vendor will maintain code centrally and run 
it on a central server. Will eliminate most, 
if not all, of the need for county 
maintenance. 


Workstations 


Dumb terminals connected to the 
mainframe. Workers cannot use them for 
purposes other than WCDS. 


PCs hooked through county servers to a 
central server. Access to word processing, 
spreadsheets, e-mail, internet (for 
community resources for clients). 


Eligibility 
determination 


Workers receive 8-12 weeks of induction 
upon assuming job to learn complex 
eligibility rules related to a single program. 
They rely on their training and on 
voluminous manuals in making eligibility 
determinations. If they move to another 
aide program, they must be retrained in the 
rules of that program. 


Eligibility rules are embedded in the 
software and updated centrally when they 
change. Determination of eligibility of all 
programs done automatically based on basic 
client information. One worker can assist a 
client with any type of assistance he/she 
might be eligibility for. 


Case budgeting 


Workers create client budgets based on 
their individual financial history. They 
calculate the budget manually, and enter it 
in WCDS. From that the system calculated 
with amount of assistance. Budgeting rules 
differ from program to program. Mistakes 
in budgeting are a frequent cause of worker 
error. 


Budgeting is fully automated and calculated 
based on input of basic raw data regarding 
income, rent, utilities, etc. Little or no 
opportunity for worker error. 


Case management 
and client tracking 


Does not include these functions. 


Will provide tools for these functions. 


Data 


Collects and reports basic demographic 
information, basic client aid payment 
history. Cannot provide data required for 
state/federal reporting under welfare 
reform. Does not collect data needed for 
policy decisions. Little ability to sort data 
to create reports. Little ability to add data 
fields. 


System is a relational database. In addition 
to client data currently collected, it is 
designed to collect all data required for 
state/federal reporting and to address 
management and policy needs identified by 
the counties. It has flexibility to adapt to 
changing data needs. 



63 



NOU-16-1959 13--Z4 



3EPT CF HJMPN SvCS 

CalWIN Cost Analysis 



415 -Z: 32"2 



P. 23^24 



EDS CONTRACT COSTS 

Qn»-Time Co«t3 

^-— CalWIN Deliverable Summary (Development/Implementation Coats) 

Task 1 - Project Planning and Reporting 

Task 2 - System Development 

Task 2 - Interim Maintenance 

Task 4 • Telecommunications Specification 

Task 5 - Acceptance Test 

Task 6 - Pilot Test 

Task 7 • Consortium^ide Implementation (enng mng/'install/cenify) 

Task 8- Training (planning, delivery . materials, snes) 

Task 9 - Conversion (software development/ data convert) 

CalWIN Project Facility 

DiCTtal Record Retention 
Local Office Hardware/Software 
TOTAL EDS ONE-TIME COSTS 
Ongoing costs 

Local Office Hardware/Software Maintenance 

Facility Management/Operationa (per caac) 

Facility Manaoement/Operationa (per item) 

WAN 

Application Software Maintenance 

TOTAL EDS ONGOING COSTS 

TOTAL EDS COSTS 



(133.041,188 

514.562,404 
$27,711,299 

n/s 

S1.952.C25 

56,259,4=5 

Se.3B1.S71 

$24, 183.521 

S21.461.2e5 

56,:" 
S22,257,7S3 
S;,iO0.0OQ 
S2.795.755 



S1.0S7.344 

S79.644.117 

S3.298.S23 

Sfi, 143. 184 

S2fi.012.700 



Attachment HZ 
Paee 1 or 1 



5135.836,943 



si2o,i9€. :sa 



rT- -~n -• 



OTHER VENDOR COSTS (FUTURE YEARS) 
Ony-dma coats 

QA VENDOR COSTS 
/-. INDEPENDENT VERIFICATION 1 VALIDATION (IV&V) VENDOR COSTS 

HARDWARE/SOFTWARE PURCHASE COSTS 

TOTAL ONE-TIME COSTS FOR OTHER VENDORS 
Ongoing costs 

HARDWARE/SOFTWARE MAINTENANCE COSTS 

TOTAL ONGOING COSTS FOR OTHER VENDORS 

TOTAL COSTS FOR OTHER VENDORS 

CONSORTIUM COSTS 
One-timo costs 

Project Team Staffing 

During Development (51 months) 
County Support Staff for JAD sessions, implementation planning, testing 
Counties -All Other 

Travel 

Site Preparation 

Conversion 

Training 
TOTAL CONSORTIUM One-time OPERATING COSTS 
Onoolno casts 

Project Team Staffing 

During Ongoing maintenance (includes County Help Desk) 
Consortium and County - All CtJier 

LAN 
TOTAL ONGOING CONSORTIUM COSTS 
TOTAL CONSORTIUM COSTS 



S9.291.7S3 

5288,800 

554,744,218 



S25.733.138 



S9.871.711 

S15.7S2.4S9 
517,576.315 
55.71G.2TC 
Sc. 451. 720 
S*. 77 S. 499 
52.632.S57 



S5-v£27.2£2 
S:-5.25S,92S 



$€5,704,887 



525.733,138 



S91 .436,025 



543.202,496 



S79,2C-.:S2 



5123.102.788 



i, -JECT TO i AL (for 51 month development and 4 vears maintenance! 



547V£cv::- 



11/15/99 



r->7_>. 



64 



Attachment III 
Paee 2 or 2 



CalWIN Project 

Consortium-wide costs 

by County-State-Federai Share 



County share - 18 counties (See Note) S 35,634,210 7.55% 

State Share S 183,097,662 38.83% 

Federal Share S 252.849,152 53.62 % 

Total Consortium-wide Project Cost S 471,581,024 100.00% 

Note: The Consortiumwide county share (7.56%) 
is less than San Francisco County's share (10%) 
because San Francisco has a larger GA caseload 
than other counties. The portion of costs related to 
the GA program is 100% county-funded. 



65 



At :ac v .~&r:' 



COUNTY SHARE OF CALWIN COST 

DISTRIBUTED 3Y COUNTY 

Entire CalWIN Project 



COUNTY 



Total Project 
Costs 



Total County 
Share 



Alameda 

Contra Costa 

Fresno 

Orange 

Placer 

Sacramento 

San Diego 

San Francisco 

San Luis Obispo 

San Mateo 

Santa Barbara 

Santa Clara 

Santa Cruz 

Solano 

Sonoma 

Tulare 

Ventura 

Yolo 

Unallocated 



$39,387,096 
S20.774.536 
S36.200.234 
S57, 187,019 

$5,511,272 
$46,716,314 
$54,492,878 
$29,419,528 

$7,524,831 
$11,434,030 
$12,632,698 
$45,335,153 

$7,374,598 
$12,754,180 
$10,714,547 
$21,473,150 
$18,749,454 

$7,208,526 

S6. 690.980 



S3.107.655 
$1,707,925 
$2,581,060 
$4,580,014 

S534.145 
S3.655.354 
S4, 519,358 
S2. 997,861 

$599,549 
S1. 032.570 
$1,071,525 
S2. 772.912 

$567,030 
S1.085.136 

S960.09 
51,713.522 
S1.419.025 

S599.463 



TOTAL $471,581.02' 



65 



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67 



Attachment VI 



San Francisco County Costs 



State riscal 
Year 


GA 


5% of Software 
development Maintenance 


Mainte- 
nance and 
Operations 


i otal County 
Costs 


99/00 


$53,487 


S22.024I 


SO 


SO 


S75.511 


00/01 


S129.898 


S48.194| 


S2.094 


SO 


S180.186 


01/02 


S161.933 


S62.505i 


S5.025 


Si. 410 


S230.973 


02/03 


S546.555 


SOI 


S5.025 


S27.815 


S579.295 


03/04 


S126.583 


SOI 


So .281 


S87.337 


S220.201 1 


'04/05 


| S98.473 


Si 8.0271 


S50.695 


S386.559 


1 $553.8601 


05/06 


SO 


SOI 


S50.595 


S365.342I S416.537| 


06/07 


SO 


SOI 


S50.695 


S373.495 


S424.190I 


07/08 


I SOI SOI 


S38.022I S278.986I S317.008I 


Total 


I S1.116.935J S150.850I 


S208.532I Si. 521.5^41 S2.997.861J 



Note: Amounts shown are based on the current County's allocations for each fiscal year. 
'Under GA column, GA share of the 15% Vendor Withhold to be paid after CalWIN 
acceptance (full implementation plus 60 consecuUve days of performance to specifications) 
and correction of cosmetic errors. 

"Under 5% of development column, the 5% of the 15% of the Vendor Withhold that :s related 
to aoplication develooment 



San Francisco County Costs 
11/19/99 



6S 



Attachment VII 



Cost Comparison - Current and Proposed Systems 





Current System - WCDS 


Proposed system 


■ CalWIN 


Issue 


Item 


Cost 


Item 


Cost 


Maintenance and 
Operation 


ED3 Contract (1) 


406,598 


EDS Contract 


2.849,545 


DTIS (2) 


Mainframe Costs 
Staff (5 FTEs) 
Mainframe Connections 


1,365,333 
522,215 
112,400 


No Mainframe Costs 




Total 




2,406,546 




2,849,545 


State Share 


25% 


601,662 


36% 


1,018,649 


Federal Share 


40% 


962,658 


49% 


1,406,705 


County GF Share 


35% 


842,326 


15% 


424.190 



NOTES 

(1) The consortium-wide cost for 1999/2000 is S5, 656, 800. San Francisco's allocation of those costs 
is S406.698. The consortium will have to maintain this contract (and the County will have to 
maintain DTIS support) until all counties in the consortium have migrated to the new system 

in the 2003/2004 fiscal year. 

(2) The new system will be maintained on a central server by the contractor, and the cost will be 
shared by the 18 counties. The current system requires each of the counties to separately 
customize, install, and maintain the software on their own mainframes. DTIS has no role 

in supporting a similarly designed statewide centralized system for DHS's Child Welfare 
Services program. 



69 



en c v 1 1 1 



CalWIN Procurement Process Summary 

The following details the events and efforts that led to awarding the CalWIN contract to 
the EDS team. 

• The CalWTN Project was listed in the Federal Registry, a publication used to notify 
the vender community of upcoming government procurements. 

• The State Department of General Services (SDGS) sent notices of RFP availability to 
350 potential vendors. Forty-two vendors responded with letters of interest. RFPs 
were sent to each of them, with a window of six months to develop a proposal. 

• The consortium's business requirements and technical description of the current 
system were available to all interested parties at that time. 

• A bidder's conference was held for all interested vendors. It was attended by 40 - 50 
people representing 20 - 25 companies. 

• Because of wide spread publicity about the California SAWS projects, vendors were 
very familiar with intended timeframes well in advance of release of the RFP, and 
were positioning themselves to compete. Two teams had begun to develop proposals 
in anticipation of release of the RFP. One was comprised of EDS, Deloitte &. 
Touche, and Unisys. The other was IBM and .Anderson Consulting. 

• EDS considered D&T and Unisys critical partners because of their experience 
developing the Leader project (Los Angeles County's SAWS solution). EDS itself 
has extensive experience working with a large consortium of counties. 

• Because the WCDS Consortium received only one bid. the proposal was analyzed for 
acceptability and was determined to meet the required standard. The Consortium 
then sought, and was granted. State approval to proceed with the single source 
procurement and began final negotiations with EDS. 

IBM ultimately decided not to submit a bid for business reasons, based on profitability. 
During negotiations prior to the submission deadline, the IBM team sought a time-and- 
materials contract as opposed to the fixed price contract required by the RFP. 

Additionally, IBM expressed hesitation to contract with a consortium of 18 separate 
counties. They may have felt that so many voices determining the project's business 
requirements would create too great a risk for them to manage. 

In addition, because IBM missed the opportunity to partner with D&T. they were not able 
to capitalize on D&T's experience with the Leader project. That may also have caused 
IBM to consider the project a bigger risk than they were willing to take. 

There are reports that IBM has entered into a partnership with D&T to bid on the SAWS 
project for Consortium Four which has aligned themselves as one legal entity, making it 
more appealing to IBM. 



70 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 



Item 13 - File 99-2104 

Department: 

Item: 



Grant Amount: 

Grant Period: 

Source of Funds: 

Required Hard 
Match: 

In-kind Match: 

Indirect Costs: 

Description: 



Sheriff 

Resolution authorizing the Sheriffs Department to accept 
a grant in the amount of $5,000,000 from the State Board 
of Corrections, and to expend $910,148 of the $5,000,000 
grant in Fiscal Year 1999-2000 for the Forensic Support 
System pilot demonstration project. 

$5,000,000 

July 1, 1999 through June 30, 2003 (four years) 

California State Board of Corrections 



$987,810 (four years) 

$1,311,344 (four years) 

$100,000 (four years) 

The California State Board of Corrections has awarded a 
$5,000,000 grant to the City to provide services for 
mentally ill criminal justice offenders. The Sheriffs 
Department proposes to expend the State grant on the 
four-year Forensic Support System (FSS) pilot 
demonstration project. The FSS project would provide a 
full range of support services to mentally ill offenders, 
including a psychiatric liaison to the court system for FSS 
clients, and a full range of multi-disciplinary community- 
based services and supports, in an effort to reduce the 
rate of incarceration for such offenders. 

The FSS project would target mentally ill offenders who 
are likely to be committed to State prison. Several City 
departments, including the Sheriffs Department, the 
Mayor's Criminal Justice Council (MCJC), the 
Department of Public Health (DPH), the Superior Court, 
the Public Defender and the District Attorney, would 
participate in the program. The Sheriffs Department 
would provide program direction, fiscal management, and 
policy direction. MCJC would work with all involved 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

71 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

agencies to ensure support for program policies. DPH, 
through a contract with Haight-Ashbury Free Clinic, a 
nonprofit agency, would provide screening and 
assessment of potential program participants, make 
referrals to community resources, and provide pre-release 
planning for FSS participants leaving jail, through Jail 
Psychiatric Services, a program of Haight-Ashbury Free 
Clinic. The Superior Court, the Public Defender and the 
District Attorney would work with the DPH psychiatric 
liaison to determine which form of sanctions or 
incarceration would be appropriate for the mentally ill 
offender. 

The four-year pilot project would also include a forensic 
case management team, which would be part of the 
existing City Wide Case Management, a joint program of 
the University of California at San Francisco and San 
Francisco General Hospital. The case management team 
would coordinate and deliver a broad range of community- 
based treatment services for the FSS participants. 

The goal of the FSS pilot demonstration project is to 
reduce jail days, arrests, and criminal justice costs by 35 
percent for FSS participant- The FSS pilot 

demonstration project also hopes to reduce the number of 
psychiatric hospitalizations for the participants. 

Approval of the proposed resolution would authorize the 
Sheriffs Department to accept a S5. 000. 000 grant from 
the State Board of Corrections, and to expend S910.148 of 
the subject grant funds in Fiscal Year 1999-2000 for 
services to mentally ill criminal justice offenders. 

Budget: The four-year budget for the proposed project would total 

ST. 299.154 (So. 000.000 in grant funds, plus SI. 311. 344 in 
in-kind matching funds, plus S987.810 in hard matching 
funds). The summary budget for the first year of the 
program is as follows: 

Salaries and Benefits S ISO. 707 

Contractual Services 1.039.803 

Administrative Overhead 100.658 

Total* SI. 321. 168 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

72 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

* Of the total amount of $1,321. 16S budgeted for the first year of the 
four-year grant, S910.148 would be expended from the subject grant 
funds. Of the remaining amount of $411,020 (SI, 321. 168, less 
$910,148), $142,635 would be City matching funds and $268,385 
would be in-kind services. 

Attachment I, provided by the Sheriffs Department, 
contains further budget details for the first year of the 
grant and for the four-year total. 

Comments: 1. The proposed resolution would authorize the Sheriffs 

Department to accept $5,000,000 in grant funds, for a 
period of four years, from the State Board of Corrections, 
and expend S910,148 of the subject grant funds in the 
first year of the four-year grant. As stated in the 
resolution, the request for authorization to expend funds 
in the subsequent three years of the four -year state grant 
would be included in the Annual Appropriation 
Ordinance, subject to Board of Supervisors approval. 

2. According to Ms. Michelle Ruggels of the Department of 
Public Health, some sendees that are provided by the FSS 
project would generate Medi-Cal funds. For instance, 
DPH would receive Medi-Cal reimbursements 1 for 
qualified mental health sendees provided to FSS 
participants through sendee contracts with City Wide 
Case Management. Such reimbursements would be 
applied toward S987,510 in required matching funds (see 
Comment 4). 

3. Ms. Mariani states that the City would apply funds 
budgeted for and expended on existing City positions and 
programs toward SI. 311, 344 in required in-kind services 
for the four-year period, as shown in Attachment I. 

4. According to Ms. Mariani, the City would award 
$4,246,917 of the four-year $5,000,0000 grant, to two 
nonprofit organizations that have existing contracts with 
the City (Haight-Ashbury Free Clinic to provide Jail 
Psychiatric Services, and UCSF to provide City Wide 
Cas3 Management services and a program e valuation). In 
addition, City Wide Case Management would receive 
$987,810 of required matching funds, provided by Medi- 



Reimbursements would come from the Federal share of Medi-Cal expenditures. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 

Cal reimbursements, for a total cost of $5,234,727 

($4,246,917, plus $987,810). 

Of the $4,246,917 in grant funds expended on nonprofit 
organizations for the four-year project, Haight-Ashbury 
Free Clinic would receive $180,000 for Jail Psychiatric 
Services 2 , and UCSF would receive $3,487,465 for City 
Wide Case Management 3 and $579,452 for program 
evaluation. 

Attachment II, provided by Ms. Ruggels, shows the 
amount of funds to be allocated, services to be provided, 
and the date of the original professional services 
contracts. 

5. As shown in Attachment I, the subject grant funds 
would fund two new positions. Therefore, the resolution 
should be amended to designate these new positions as 
"G" or grant-funded positions, which would terminate 
when the grant expires. 

6. Attachment III, provided by the Sheriffs Department, 
is the Grant Application Information Form. 

7. The Disability Access Checklist is on file with the Clerk 
of the Board. 

Recommendations: 1. Amend the resolution to designate the two new 
positions created under the subject grant as "G" or grant- 
funded positions, which would terminate when the grant 
expires. 

2. Approve the proposed resolution, as amended. 



: Funds would be expended on Jail Aftercare Sen-ices Expansion, which is a program of Jail 

Psychiatric Services. 

3 Forensic Case Management Team is a program of City Wide Case Management. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

74 



Memo to Finance and Labor Committee 

December 1, 1999 Finance and Labor Committee Meeting 




Harvev M. Rose 



cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakey 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

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77 



- I 1UH 



Attachment II 




City and County of San Francisco 
Department of Public Health 



:?/ COMMUNITY MENTAL HEALTH SERVICES 



Michelle Ruggels, MPA 

Budgat Manager 

1380 Howard Street, 5th Floor 

San Francisco, CA 94103 

415.255.3404 FAX 415.255.3557 



M»E»M>OR»A*N«D«U«M 



DATE: 

TO: 

FROM: 

SUBJECT: 



November 22, 1999 

Severin Campbell, Budget Analyst Office 

Michelle Ruggels, Budget Manager M 

Explanation of Contractual Expenditures for Forensic Support System 
Pilot Demonstration Program 



L, 



Of the total cost of $7,299,154 for the Forensic Support System pilot demonstration 
project, an amount of $5,918,547 will be allocated for contractual services, including (1) 
$4,246,917 in grant funds, (2) $987,810 in Federal Short Doyle MediCal (Local Hard 
Match funds), and (3) $683,820 in Local In-Kind Match funds. These funds will be 
allocated as follows: (1) $5,054,727 to UC San Francisco Clinical Practice Group for (a) 
an evaluation of the Pilot Demonstration Program ($579,452 in grant funds) and (b) 
Citywide Case Management program ($3,487,465 in grant funds and $987,810 in Federal 
MediCal Hard Match funds), and (2) $863,620 in grant funds to Haight Ashbury Free 
MediCal Clinic to be used by its (a) Jail Aftercare Services Program ($180,000 in grant 
funds), and (b) Jail Psychiatric Services Program ($683,820 in In-Kind Match funds). 

The Department of Public Health (DPH) awarded a contract to the UC San Francisco 
Clinical Practice Group (UC), Citywide Case Management program, (CWCM), in 1989 
as a result of a Request for Proposal Process. For the subject pilot program, CWCM's 
Forensic Case Management Team will provide a full array of treatment and supportive 
services to medically indigent offenders. 

The DPH awarded a contract to the Haight Ashbury Free Medical Clinic (HAFMC), Jail 
Psychiatric Services program in 1990 as a result of an Request for Proposal process. The 
HAFMC is a non-profit organization. For the subject pilot program. Jail Psychiatric 
Services, (TPS) a program within HAFMC, will provide existing personnel to screen 
and assess all prospective program participants, provide medication management, 
individual and group therapy, and ongoing monitoring of inmates while they axe 
incarcerated. Jail After Care Services, a component of JPS will provide pre-release 
planning for program participants, including obtaining benefits ana housing. 



78 



File Number: Attach~e~t I' 

Page 1 of 3 



Grant Application Information Form 

A document required to accompany a proposed resolution 
\uthorizing a Department to Accent & Exnend Grant Funds 



To: The Board of Supervisors 
Attn. Clerk of the Board 

The following describes the grant referred to in the accompanying resolution: 

1 . Department: Sheriffs Department 



2. Contact Person: Jean Mariani Telephone: [4j 51 55-—316 

3. Project Title: ^ Mentally 111 Offender Crime Reduction Grant: Forensic Support SvsTen 

4. Grant Source Agencv:_ State Board of Corrections 

5. Type of Funds: Federal Federal-State (Pass-Through) X_State Local _ Private 

6. Proposed ( New / Continuation) Grant Project Summary- 
Provide a comprehensive support system for mentally ill offenders (MIOs) who are likely to 
be committed to state prison. The Forensic Support System (FSS) will have a static capacitv 
of 100 mentally ill offenders, including 25 MIOs on state parole and 75 jail inmates who 
meet certain criteria. A full-time psychiatric liaison position will provide clinical consultation 
regarding FSS participants, working with court, public defender and district attorney 
personnel. A full-time adult probation officer will provide intensive supervision for FSS 
participants, as appropriate. The FSS Forensic Case Management Team will coordinate a 
broad range of community-based services, available 24 hours per day. The grant includes 
funding for evaluation of the pilot program to determine whether the program achieves the 
following outcomes: 35% fewer jail days, 35% fewer arrests, 35% fewer criminal justice 
costs. Funding is also provided for one administrative analyst position in the Sheriffs 
Department to assist with day-to-day coordination of the project, including staffing the 
Executive Steering Committee (required by S3 14S5), extensive data collection and analysis, 
and financial and program reporting. 

7. Amount of Grant Funding Applied for: S 5 .000. 000 



S. Maximum Funding Amount Available: S5. 000. 000 



79 



A — ac'r.-er.- Ill 
raze 2 cf 3 



9. Required Matching Funds Yes: X No: / Cash or In-kind Both 



It yes, list dollar amount and identify source of Matching Funds in Department Bu : 

In-kind match of S627.524 includes equivalent of one Adult Probation Officer and 
portions of the salaries of the Sheriff. Budget Manager, and members of the MIO 
Executive Steering Committee as well as administrative and program support from 
Sheriff, Mental Health, and other City departments. Additional in-kind match of 
S6S3,S20 provided by Jail Psychiatric Services for assessment and clinical services 
provided to inmates in the jaiis. Projected hard match of S9S7,S10 of new Medi-Cal funds 
generated through services to clients in demonstration project. 

10. Number of new positions created and funded: _ One Administrative Analvst. Sheriffs r>pr; 
One Probation O fficer. Adult Probation Department 

1 1. If new positions are created, explain the disposition of employees once the grant ends? 

There are three possible dispositions: State will extend grant funding, contin_ 
program and need for positions; City will replace lost grant funds with City funds; if 
program is not continued, employees may be laid c 

12. Are indirect costs eligible costs for this grant Yes: _£_ No: 

If yes, please identify the amount of S in indirect costs ?_S1 00.000 



13. .Amount to be spent on contractual services: _ S-.:--'. c "~ - so '".Sin of Medi-Cal fu^ ns 

14. a.) Will contractual services be put out to bid° _ No: added to exi?:ine contracts. 

b). If so, will contract services help to runner the goals of the department's MBE WBE 

requirements? _ Services provided by nor-pro:":: o-ganizatior.s. 

15. Is this likely to be a one-time or ongoing request for contracting out Fordurat:-- ■■'—- 

16. Term of Grant: Start-Date: _ July 1. ! QQG End-Date: June 30. 200." 

1 7. Date Department Notified of Available Funds: _ Comrac: rece ; vec Novembe- 2. | ggg 
IS. Grant Application Due Date: \A ^___ 



80 



Attachment IT. 
Page 3 of 3 



19. Grant Funding Guidelines and Options (selected from RPP, grant announcement or 

appropriations legislation): 

Grantee required to provide at least 25% local match. Any interest earned on grant funds 
must be used for eligible grant activities or returned to the Board of Corrections. Grantee 
required to submit final audit to Board of Corrections within 120 calendar days of the 
contract ending date. Grant requires quarterly financial invoices and semi-annual progress 
reports. Grant includes a program evaluation survey to determine the effectiveness of the 
project. 

20. Department Head Approval: Michael Hennessey Sheriff 

(Title) 




(Signature) 
/ 



81 



X0^§&, City and County of San Francisco 

154 rftmmrm Meeting Minutes 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

Finance and Labor Committee 94102-4689 



fi 



Members: Supervisors Leland Yee, Sue Merman and Tom Ammiano 
Clerk: Mary Red 



Wednesday, December 08, 1999 10:00 AM City Hall, Room 263 

Regular Meeting 

Members Present: Leland Y. Yee, Sue Bierman, Tom Ammiano. 

DOCUMENTS DEPT, 
Meeting Convened SEP 1 8 2000 

The meeting convened at 10: 10 a.m. ^ F RANCl 

PUBLIC LIBRARY 

992114 [Reserved Funds, Department of Children, Youth and their Families] 

Hearing to consider release of reserved funds, Department of Children, Youth and their Families, (1999-2000 
Budget), in the amount of $250,000 to fund a pilot program to increase access to health insurance for child 
care providers. (Mayor) 
1 1/15/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Deborah Alvarez, Director, Department of 
Children, Youth and Their Families. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



991923 [Expenditure of Community Court Program Fines] 
Supervisor Brown 

Ordinance amending Administrative Code by adding Section 10.1 17-124 to require the Controller to 
separately account for fines awarded to the City through community court dispute resolution programs and 
appropriating those funds to enhance public safety and the quality of life in the communities served by the 
community courts. 

(Adds Section 10.117-124.) 

10/12/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

1 1/17/99, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Kimiko Burton-Cruz, Director, Mayor's 
Criminal Justice Council; Supervisor Ammiano; Supervisor Yee. Continued to December 1, 1999. 
12/1/99, CONTINUED. Continued to December 8, 1999. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Supervisor Brown; Kimiko Burton-Cruz, 
Director, Mayor's Criminal Justice Council; Supervisor Yee; Supervisor Bierman; Supervisor Ammiano 
REFERRED WITHOUT RECOMMENDATION by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



City and County of San Francisco 1 Printed at 5:56 PM on 12W99 



Finance and Labor Committee 



Meeting Minutes 



December 8, 1999 



992075 [Reserved Funds, Asian Art Museum] 

Hearing to consider release of reserved funds, Asian Art Museum, rn the amount of $32,002,738 ($7,605,863 
of 1989 Earthquake Safety Bonds Series 1996B and $24,893,770 of Asian Art Relocation Project Bond Series 
1996E: Ordinance No. 278-97), to fund the construction contracts and other improvements to upgrade the Old 
Main Library building. (Asian Arts Commission) 
1 1/3/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Ikuko Satoda, Asian Art Museum; Supervisor 
Bierman; Emily Sano, Director, Asian Art Museum; Supervisor Yee; George Wong, Deputy City Attorney. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992141 [Amendment of leases of real property at 1307 and 317-1317C Evans Avenue for the use of DPH Mental 
Health Division] 

Resolution authorizing an amendment to leases of real property at 1307 and 1317-13 17C Evans Avenue, San 
Francisco, to increase the size of the premises by 601 square feet and establish a uniform expiration date for 
the Mental Health Division of the Department of Public Health. (Real Estate Department) 
1 1/17/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Tony DeLucchi, Real Estate Department. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992185 [Government Funding, Superior Court] 

Ordinance rescinding and reappropriating $23,643, professional services to salaries and fringe benefits and 
creating one (1) position for the Superior Court for fiscal year 1999-2000. (Controller) 

(Companion measure to File 992186.) 

1 1/23/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alan Carlson, Chief Executive Officer, 

Superior Court; Ed Harrington, Controller; Supervisor Bierman; Kim Harmon, Director, Dependency 

Mediation Program, Superior Court. Amended to reduce funds requested to $1 7,843 and to designate new 

position as "L" , Limited Tenure; new title. 

AMENDED. 

Ordinance rescinding and reappropriating $17,843, professional services to salaries and fringe benefits and 

creating one (1) position for the Superior Court for fiscal year 1999-2000. (Controller) 

(Companion measure to File 992186.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Yee, Bierman, Ammiano 



City and County of San Francisco 



Printed at 5:$6PM on 12,1W 



Finance and Labor Committee 



Meeting Minutes 



December 8, 1999 



992186 [Public Employment, Superior Court] 

Ordinance amending Ordinance No. 209-99 (Annual Salary Ordinance, 1999-2000, reflecting the creation of 
one position (Class 0366 Dependency Mediation Assistant), for the Superior Court. (Department of Human 
Resources) 

(Companion measure to File 992185.) 

1 1/23/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alan Carlson, Chief Executive Officer, 
Superior Court; Ed Harrington, Controller; Supervisor Bierman; Kim Harmon, Director, Dependency 
Mediation Program, Superior Court. Amended to designate new position as "L" , Limited Tenure. 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Yee, Bierman, Ammiano 



992095 [Charitable Distribution of Food] 
Supervisors Yee, Ammiano 

Hearing to consider the City's practice of confiscating food distributed by charitable organizations, including 

Food Not Bombs, and arresting members of the clergy and other volunteers for distributing food. 

1 1/8/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

1 1/17/99, CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speakers: John Di Donna. 

12/1/99, CONTINUED TO CALL OF THE CHAIR. 

Heard in Committee. Speakers: Hugh Mejia, Food First; Karen Parker, Human Rights Attorney; Rajiv 

Bhatia, M.D., Health Department; R.G. Goody, POWER; Sister Bernie Galvin, Religious Witness; Aroza 

Simpson, Gray Panthers; Rebecca Vilkowerson, Homeless Prenatal Program; Supervisor Bierman; Dennis 

Cunningham, National Lawyers Guild; Supervisor Ammiano ; Ted Lakey, Deputy City Attorney; Roland; Ray 

Razin; Larry Edmond; Robert Noise, Homeless united for Friendship & Freedom, Santa Cruz; Frank Martin 

Campo; Mr. Martin, Coalition on Homelessness; Supervisor Yee. 

FILED by the following vote: 

Ayes: 2 - Yee, Bierman 

Absent: 1 - Ammiano 



ADJOURNMENT 

The meeting adjourned at J 1:50 a.m. 



City and County of San Francisco 



Printed at 5:56 PM on 12W99 



Public Library,Gov't Info. Ctr., 5 th Fir. 
Attn: Susan Horn 



>CA5</ 



le/n 



CITY AND COUNTY 




OF SAN FRANCISCO 



JSOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



December 3, 1999 
TO: ^Finance and Labor Committee 

FROM: JBudget Analyst 
SUBJECT: December 8, 1999 Finance and Labor Committee Meeting 



Item 1- File 99-2114 
Department: 

Item: 

Amount: 
Source of Funds: 

DOCUMENTS DEPT. 

DEC - 7 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 

Description: 



Department of Children, Youth, and Their Families 
(DCYF) 

Hearing to consider the release of reserved funds in the 
amount of $250,000 to implement the San Francisco 
childcare providers healthcare benefits Pilot Program. 

$250,000 

Funds reserved in the Fiscal Year 1999-2000 DCYF 
budget. During the FY 1999-2000 budget hearings, the 
Finance and Labor Committee recommended, and the full 
Board of Supervisors approved, an appropriation of 
$250,000 to fund a Pilot Program to provide health 
insurance benefits to childcare providers in San 
Francisco. Such funds were placed on reserve pending 
the submission of program plan and budget details to the 
Finance and Laboi Committee. 

The Childcare Providers Healthcare Benefits Pilot 
Program is intended to provide access to more affordable 
health insurance to the City's childcare providers. The 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 

program aims to increase the quality of childcare by 
decreasing the high turnover rate among providers and 
attracting new childcare professionals into the field by 
providing affordable health insurance. 

The program would contract with a group health 
insurance plan 1 , available to all childcare providers 
operating in San Francisco. The plan would create a 
purchasing pool which would allow (a) licensed individual 
family childcare providers, who provide childcare for up to 
14 children in their homes, to purchase health, dental, 
and vision insurance for themselves, (b) licensed childcare 
centers to purchase such insurance for their employees, 
and (c) employees of licensed childcare centers who are 
not currently insured to purchase such insurance as 
individuals. 

Under this proposed Pilot Program, those family childcare 
providers, with family income which does not exceed 250 
percent of the Federal poverty level, would be eligible to 
receive a subsidy from the proposed Pilot Program to pay 
two-thirds of the premium cost. 2 All other family 
childcare providers, childcare centers, and employees of 
childcare centers that purchase insurance from the group 
health plan would pay the full premium cost to the health 
plan. 

Approval of the proposed release of reserves would 
authorize DCYF to expend $250,000 over a one year 
period for the Childcare Providers Healthcare Benefits 
Pilot Program. 

Budget: The estimated budget for the proposed Pilot Program is as 

follows. 

Administration and Start-Up 

Costs (a) S 50.000 

Health Insurance Premiums (b) 200.000 



1 The group health insurance plan, such as Blue Shield. San Francisco Health Plan or another 
qualified health plan, would be selected through a Request for Proposal process. Individual family 
childcare providers and childcare centers would purchase insurance from and make premium 
payments to the selected group health insurance plan, through the benefits administrator. 

2 Under the current proposal, the City would pay the subsidy directly to the health benefits 
administrator on behalf of the childcare provider. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 

Total $250,000 

(a) As explained in the attached memorandum, provided 
by DCYF, estimated administration and start-up costs, 
totaling $50,000, would be: $12,500 for DCYFs program 
costs to oversee the program, $13,680 for the health 
benefits administrator (based on a estimated cost of $90 
per year for 152 subsidized childcare providers), and 
$23,820 for outreach and program evaluation. 

(b) The City would subsidize two-thirds of the premium 
costs, payable to the selected group health insurance plan, 
for approximately 152 individual family childcare 
providers in the first year of the program, at an estimated 
cost of $199,424 (Two-thirds of the estimated annual 
premium cost of $1,968, based on the current annual 
premium for the San Francisco Health Plan, equals 
$1,312. 152 times $1,312 equals $199,424 m annual 
premium costs.) 

Comments: 1. According to Ms. Nani Colore tti of DCYF, once the 

subject funds are released, DCYF would issue a Request 
for Proposal (RFP) to select a health plan, and would 
require that the health plan subcontract with a benefits 
administrator. Ms. Coloretti states that the above budget 
is an estimate, and that the actual budget is subject to the 
RFP process. 

2. Ms. Coloretti states that the one-year Pilot Program 
would permit individual family childcare providers, 
childcare centers, and individual employees of childcare 
centers to purchase health insurance, including dental 
and vision, from the group health plan at their own cost. 
Additionally, as noted above, Ms. Coloretti states that the 
Pilot Program would subsidize two-thirds of the cost of 
health, dental, and vision insurance for approximately 
152 individual family childcare providers with family 
income which does not exceed 250 percent of the Federal 
poverty level. The subsidy would not be available to 
individuals who are eligible for other public health 
insurance, such as Medi-Cal. Nor would the subsidy be 
available to the providers' dependent children, who, 
according to Ms. Coloretti, would generally be eligible for 
Medi-Cal or Healthy Families, the State and Federally 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 



funded program to provide health insurance benefits to 
low-income children. Family childcare providers, childcare 
centers, and individual employees of childcare centers 
could purchase health insurance through the group health 
plan for their family members and themselves at their 
own cost. 

3. Ms. Coloretti states that the intent of the group health 
plan is to provide health insurance at a lower cost than 
individual private health insurance plans, and to 
generally offer a better benefit package than such plans. 
In addition, the group health plan would not exclude 
individuals with pre-existing medical conditions. 

4. According to Ms. Coloretti. the Childcare Providers 
Healthcare Benefits Pilot Program would have two 
phases. In phase one, which is the subject of this hearing, 
the program would offer a subsidy to individual family 
childcare providers with income which does not exceed 
250 percent of the Federal poverty level, equal to two- 
thirds of the health insurance premium. In phase two. m 
addition to the subsidy already offered to the individual 
family childcare providers, the program would offer a 
subsidy to childcare centers which meet specific criteria 3 
to purchase health insurance for the center's employees, 
equal to one-third of the health insurance premium. To 
obtain the subsidy, the center would be required to pay at 
least one-third of the employees' health insurance 
premium, for a total subsidy provided by the program and 
the center equal to two-thirds of the total cost of the 
employees' insurance premium. 

5. According to Ms. Coloretti, the proposed release of 
$250,000 in reserved Children's Fund monies would pay 
for program start-up and administration costs and health 
insurance premium subsidies for one year. Additional 
Children's Fund monies, subject to Board of Supervisors 
approval, would be required in future years to pay health 
plan administration costs and premium subsidies. 



3 Such criteria include that (a) the childcare center serve at least 50 percent low-income children 
with family income that does not exceed 75 percent of the State median income, (b) the center has 
not offered health insurance benefits for at least six months, (c) ensure that at least 70 percent of the 
employees participate, and (d) pay at least one-third of the premium costs on behalf of the 
employees. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 
4 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 

including the additional costs to expand the subsidy to 
pay one-third of annual premium costs for employees of 
eligible childcare centers. 

Recommendation: Based on the prior policy decision of the Board of 

Supervisors to authorize the program, approve the 
requested release of reserves. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Atcacninent: 



Department of Children, 
Youth and Their Families 

Deborah Alvarez-Rodriguez 
Director 




Willie L. Brown, Jr. 
Mayor 



MEMOR.VNDI M 



To: 
From: 

Date: 

Su$jSC1 



Severin Campbell 

Nani Coloretti '^ 

Rachel Aberbach^v 

November 30. 1999 

Administrative and Start-up Costs for Child Care Provider Health Benefits 



You had asked about a breakdown for the S50.000 in proposed administrative and start-up costs. 
The Department plans to spend this funding as follows: 



Item 



Cost 



Benefit Plan Administration 1/ 
Outreach and Evaluation 2/ 
Department Administration 3/ 



SI 3.680 
S23.820 
$12.300 



Total 



S50.000 



1/ Based on 152 individuals at S7.50 per member per month 

2/ Outreach includes advertisements and informational meetings. Evaluation will include 

telephone and mail surveys in order to determine the effectiveness of the pilot. 

3 This amount represents 5% of the total program cost which is below DCVF*s standard 

charges. This amount covers program and fiscal monitoring for new contracts. 

Please call Nani or Rachel at 554-8P90 with any further questions. 



Fox Plaza ♦ 1390 Market Street ♦ Suite 918 ♦ San Francisco ♦ CA 9-4102 



415.554.8990 Phone ♦ 415.554.8965 Fax 
6 






Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 

Item 2 - File 99-1923 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of December 1, 1999. 

Department: Mayor's Criminal Justice Council 

Item: Ordinance amending Article XIII, Chapter 10, Part 

I of the San Francisco Municipal Code 
(Administrative Code) by adding Section 10.117- 
124 to require the Controller to separately account 
for fines awarded to the City through Community 
Court Dispute Resolution Programs and 
appropriating those funds to enhance public safety 
and the quality of life in the communities served by 
the Community Courts. 

Description: Community Courts, according to Mr. Travis Kiyota 

of the Mayor's Criminal Justice Council, are a State 
authorized means of diverting quality of life 
misdemeanor offenses from the traditionally 
backlogged courts and criminal justice S3 r stem to 
the community where the offenses occurred. Mr. 
Kiyota advises that the quality of life misdemeanor 
cases referred to Community Courts include open 
alcohol containers, petty gambling, loitering, shop 
lifting, possession of small quantities of marijuana, 
grafitti, etc. Mr. Kiyota advises that in November 
of 1998, the City created two Community Courts in 
the City, one in the Bayview and one in the 
Oceanview-Merced-Ingleside (OMI) Community. 

The California Community Dispute Services, a non- 
profit organization, with the assistance of the 
District Attorney's Office, trains community 
residents and merchants to sit as the three 
volunteer panel members on each Community 
Court to hear these misdemeanor cases. The 
District Attorney's Office forwards letters to the 
individuals cited for the misdemeanor cases 
referring them to the specific Community Courts at 
a set-aside date and time. Alternatively, the 
individual cited with the misdemeanor can choose 
to go through the traditional court system to settle 
the matter. 

During the hearing before the Community Court, a 
Police Officer is present to read the case report. The 
BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 



panel members then question the individual 
regarding the misdemeanor case. The panel then 
decides on the case, and if found guilty, the panel 
typically gives the individual a choice of paying a 
fine or performing community service. 

If the individual chooses community service, they 
are referred to the Pretrial Diversion Project, a 
non-profit organization, that provides community 
services, under contract with the Sheriff and the 
Department of Parking and Traffic. If the 
individual chooses community service, the 
individual will be required to perform the 
community service hours in the community where 
the misdemeanor occurred. Mr. Kiyota reports that 
those individuals choosing to pay the fine are 
required to pay the fine to the City and County of 
San Francisco. According to Mr. Kiyota, the 
California Community Dispute Services collects the 
fines and forwards the checks to the Fiscal Division 
of the Police Department, which deposits the funds 
into a Bank of America account, known as the 
Community Court Dispute Resolution Program 
Funds. 

As of November 3, 1999, Mr. Kiyota reports that 
the Community Court Dispute Resolution Program 
had a balance of $12,262 in the Bank of America 
account, including $11,137 from the Bayview and 
$1,125 from the OMI. To date, Mr. Kiyota advises 
that none of the collected fines have been expended. 
According to Mr. Kiyota. if the proposed ordinance 
is approved, all of these funds will be transferred to 
the proposed Controller accounts. 

Mr. Kiyota advises that the OMI Community Court 
is planned to be expanded to include the entire area 
covered by the Taraval Police Station, and to be 
renamed the Taraval Community Court. The 
proposed ordinance would require the Controller to 
separately account for the penalties, fines and 
other payments awarded to the City and County by 
(1) the Bayview Community Court. (2) the Taraval 
Community Court and (3) any additional 
Community Courts established in other San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 

Francisco neighborhoods. Furthermore, Mr. Kjyota 
reports that the penalties, fines and other 
payments referenced in the proposed ordinance 
would include the fines received by the Community 
Courts from the individuals cited for the 
misdemeanors as well as any other gifts of funds 
that the Community Courts might receive. Mr. 
Kiyota reports that to date, the Community Courts 
have not received any gifts of funds, but there has 
been no means to accept such gifts. 

Under the proposed ordinance, funds deposited into 
each of these Community Court accounts could only 
be expended to enhance public safety and the 
quality of life in that specific community (i.e., 
Bayview, Taraval or other neighborhood 
communities), and to support the specific 
Community Court Programs. In other words, the 
funds awarded by the Bayview Community Court 
could only be expended to enhance public safety 
and the quality of life in the Bayview Community 
and to support the Bayview Community Court 
Program. 

In accordance with the proposed ordinance, the 
Director of the Mayor's Criminal Justice Council, in 
consultation with the Police Chief, District 
Attorney, Chief Executive Officer of the Superior 
Courts and the Controller shall establish guidelines 
for the specific disbursement of the penalties, fines 
and other payments, consistent with the guidelines 
outlined above. Any expenditure of $5,000 or less 
could then be disbursed by the Director of the 
Mayor's Criminal Justice Council, in consultation 
with the Police Chief, District Attorney and the 
Chief Executive of the Superior Court. Any 
expenditure in excess of $5,000 would also require 
appropriation approval by the Board of 
Supervisors. As stated in the proposed ordinance, 
all costs that may be incurred by any City 
department in administering these monies shall be 
absorbed within that department's existing budget. 

Comments: 1. According to Mr. Eugene Clendinen of the 

Mayor's Criminal Justice Council, the initial two 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

9 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 

Community Courts were established as a pilot 
program to address minor misdemeanors occurring 
in these communities, that are diverted from the 
Trial Courts. Mr. Clendinen reported that these 
two Community Courts were established through 
an initial $50,000 Federal law enforcement block 
grant and have been continued with a $150,000 
Federal Department of Justice grant. According to 
Mr. Kiyota, the current Federal law enforcement 
grant ends in April of 2000. Mr. Kiyota reports that 
if these projects are determined to be successful, 
the Mayor's Office will recommend other funding 
sources to continue the operations of these 
Community Courts. 

2. Mr. Ed Harrington reports that he has reviewed 
the proposed ordinance, which would require the 
Controller to separately account for the fines 
awarded to the City through the Community Court 
Dispute Resolution Programs. Mr. Harrington 
advises that this is a preferable arrangement than 
an earlier version of this legislation which had 
required the creation of additional Special Funds 
by the Controller's Office. According to Mr. 
Harrington, any interest earnings from the 
proposed funds will accrue to the City's General 
Fund. 

3. Mr. Kiyota advises that the proposed ordinance 
specifically states that "No cost that may be 
incurred by any City department in administering 
these monies shall be recovered therefrom." 
Therefore, Mr. Kiyota reports that under the 
proposed ordinance, neither the Controller nor any 
other City department would receive 
reimbursement for the costs of administering the 
proposed accounts. The costs to administer these 
funds are generally minimal, according to Mr. 
Harrington. However, Mr. Harrington advises that 
if maintaining these accounts becomes a problem, 
the Controller's Office will notify the Board of 
Supervisors at that time, in order to remedy the 
situation. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 



4. As noted above, the current two Community 
Courts have been initiated with grant funds, which 
are due to terminate in April of 2000, 
approximately five months. Based on discussions 
with the Mr. Kiyota, although the funds can be 
used to support the Community Court programs, 
the main purpose of the proposed ordinance is to 
expend the funds collected by the Community 
Courts to enhance public safety and the quality of 
life in each of the Community Court communities. 
Mr. Kiyota furthermore notes that the funds 
generated by the Community Courts are not 
sufficient to sustain the overall operations and 
maintenance of the Courts. 

Mr. Kiyota reports that each Community Court 
currently has two staff members, one from Pre-trial 
Services and one from the California Community 
Dispute Services, both non-profit organizations. 
Mr. Kiyota estimates that the operating costs for 
each of the Community Courts is approximately 
$70,000 to $80,000 annually. As noted above, these 
Community Courts have been funded with grant 
funds, that terminate in April of 2000. Therefore, 
the Budget Analyst recommends that before a long- 
term decision is made regarding how the funds 
generated by the Community Courts would be 
spent, which is the subject of the proposed 
legislation, a long-term funding source should be 
identified to provide the ongoing operations and 
administration for the Community Courts, if they 
prove successful. 

5. In accordance with the proposed ordinance, 
appropriation of funds less than $5,000 would not 
be subject to the Board of Supervisors approval. 
The Budget Analyst notes that since the creation of 
the two Community Courts in November of 1998, 
approximately one year ago, a total of only $12,262 
has been generated by the fines and penalties 
assessed by the two Community Courts. Given the 
amount of funds currently being generated by each 
of these Community Courts, it is not likely that 
there would be allocations of funds greater than 
$5,000 in the near future. Mr. Kiyota responds that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance and Labor Committ' •>• 

December 8, 1999 Finance and Labor Committee Meeting 

he anticipates the expenditures would be in 
increments of approximately $500 or less, which, in 
accordance with the proposed ordinance, would not 
be subject to the Board of Supervisors approval. 

6. At the November 17, 1999 Finance and Labor 
Committee Meeting, the Chair requested that the 
Mayor's Criminal Justice Council provide 
assurances that (1) the individual civil rights of 
those persons being charged with the 
misdemeanors are protected; (2) the meetings of the 
Community Courts are tape recorded; and (3) the 
guidelines include protections to assure that the 
funds collected do not go to those persons or 
organizations who are members of the Community 
Courts. 

Recommendations: As discussed in Comment No. 4, before a long-term 
decision is made regarding how the funds 
generated by the Community Courts would be 
spent, which is the subject of the proposed 
legislation, the Mayor's Criminal Justice Council 
should report to the Board of Supervisors 
identifying a long-term funding source to provide 
the ongoing operations and administration for the 
Community Courts, if they prove successful. 

Approval of the proposed ordinance is a policy 
matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 



Item 3 - File 99-2075 

Department: 

Item: 



Asian Art Museum (AAM) 

Hearing to consider the release of reserved funds in the 
amount of $32,002,738 to fund construction contracts for 
the Asian Art Museum. 



Amount: 
Source of Funds: 



Description: 



832,002,738 

1989 Public Safety Improvement Bonds 

Series 1996B: $7,537,051 

Asian Art Relocation Project Bonds 

Series 1996E: 24.465.687 

TOTAL $32,002,738 

In Jury of 1997, the Board of Supervisors approved an 
appropriation in the amount of $32,499,633 from 1989 
Public Safety Improvement Bonds Series 1996B 
($7,605,863) and 1994 Asian Art Museum Relocation 
Bonds Series 1996E ($24,893,770) to renovate the old 
Main Library building for the purpose of relocating the 
Asian Art Museum from Golden Gate Park to the Civic 
Center (Ordinance No. 278-97). 

Of the above-noted $32,499,633 in previously 
appropriated funds, the Board of Supervisors placed a 
total of $32,002,738 on reserve for renovation of the old 
Main Library building pending selection of 
subcontractors, and submission of subcontractor and 
other cost details. The balance of $496,895 was 
appropriated to the Department of Public Works for bond 
issuance costs, financial administration, and related costs. 

As shown in Attachment I, this request would release 
$32,002,738 out of the total project costs of $37,615, 76S 
for five subcontractors selected under a competitive 
bidding process to renovate the old Main Library building 
for the Asian Art Museum. As shown in Attachment I, 
the balance of $5,613,030 would be funded by 1994 Asian 
Art Museum Relocation Bonds Series 1999D. Ms. Satoda 
states that a request for such funds will be submitted to 
the Board of Supervisors for approval in the near future. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

13 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 



As indicated in the attached memorandum from Mr. David 
Norman of the City Attorney's Office (Attachment II), a 
joint venture of Lem Construction Company and DPR 
Construction ("LEM/DPR") has been retained as the 
project's general contractor. The LEM/DPR contract is 
funded by private contributions from the Asian Art 
Foundation. The five subcontractors listed in Attachment 
I would be subcontractors of LEM/DPR. 



Budget: 



As noted above, Attachment I, provided by the AAM, 
contains a list of the five subcontractors and their related 
work descriptions, resulting in a total cost of $37,615,768. 



Comments: 



Each of the five subcontractors listed in Attachment I was 
selected through a competitive bidding process, according 
to Ms. Satoda of the AAM. Attachment III, provided by 
the AAM, contains a list of all bidders and the amounts 
bid. 



Recommendation: Release the requested reserve for $32,002,738. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Attachment I 



ASIAN ART MUSEUM 



CONSTRUCTION CONTRACTS AWARDED 


SUBCONTRACTORS 


DESCRIPTION 


AMOUNT 


Aman 


Structural Demolition 


$3,998,000.00 


Total Structural Demolition 




$3,998,000.00 


Bostrom Bergen 


Structural Steel 


$17,981,798.00 


Total Structural Steel 




$17,981,798.00 


S.J. Amoroso 


Structural Concrete 


$13,497,400.00 


Total Structural Concrete 




$13,497,400.00 


Thyssen Dover Elevator 


Conveying System 


$1,360,000.00 


Total Conveying System 




$1,360,000.00 


Ryan Engineering 


Earthwork, Trenching, Civil Demolition 


$778,570.00 


Total Earthwork, Trenching 




$778,570.00 


TOTAL PUBLIC CONTRACTS 




$37,615,768.00 



Total Public contracts to date 
Cash to be released from reserve 
Balance 



to be paid out of 1994 Asian Art Museum Relocation 
bond series 1999D. 



$37,615,768 
$32,002,738 



$5,613,030 



15 



City and County of San Francisco 



Louise H. Renne 
City Attorney 



Attachment II 
p a<ze 1 ot 2 

Office of the City Ano* i 




DAVID L. NORMAN 

Deputy City Attorney 



E-Mai. 



- 3»8» 
aovtd_nofmon^;: ;• CO US 



November 4, 1999 



I l.u\cy Rose 

Budget Analysts Office 

1390 Market Street, Suite 1025 

San Francisco, CA 94102 

Re: The New Asian Museum Project 

Dear Mr. Rose: 

Since the above project is being funded, in part, with public funds, the Asian Art 
Commission has asked that I write to you and explain the procedures that have been used on the 
Asian Art Project to ensure that the City's ordinances pertaining to public work contracting and 
the utilization of minority and women-owned business enterprises are being followed. Both 
Deputy City Attorney George K. Wong and myself have been actively involved in counseling 
the Asian Art Commission on this project. Below is a desenption of the procedures undertaken 
by the new Asian Art Museum Project to comply with the City's contracting requirements. 

First, funds contributed from the Asian Art Foundation were used to hire a general 
contractor, a joint venture of Lem Construction Company, a minonty-owned enterpnse, and 
DPR Construction ("LEM/DPR"), to act as the Project's construction manager. Lem owns 51% 
of the joint venture. Under its contract with the Asian Art Foundation. LEM'DPR will be paid a 
fixed administrative fee for construction management services and to assist the Asian Art 
Foundation and its architect in developing numerous trade package contracts for the Project for 
competitive bidding by both the City's Asian .Art Commission and the private Asian Art 
Foundation ("Foundation"). The trade packages bid by the Commission are to be paid for with 
public funds. Those trade packages remaining to be bid are to be paid by the Foundation with its 
private funds. Although the Foundation may enter into negotiations with bidders for the work 
paid for with private funds, the Foundation nevertheless is working with the City's Human 
Rights Commission to meet the project-wide MBE'WBE participation goals that were 
established by the HRC. 

Second, after both the publicly and privately-funded trade package contracts have been 
advertised for competitive bids and the contracts have been awarded by either the City's 
Commission or the Foundation, both the Commission and the Foundation will assign and novate 
the contracts to LEM'DPR such that the successful low bidders become direct subcontractors to 
LEM/DPR. Thereunder, each subcontractor must perform for LEM/DPR the work they were to 
perform for the Commission and Foundation. Also pursuant to the novations. LEM'DPR will 
ultimately be responsible for administering all of the trade package contracts and must ensure 
that the work is performed to the Commission's and Foundation's satisfaction. 



FoxPiaM 1390 Market STREET. Fifth Floor- San Francisco. California 94102-5408 
Reception: (415) 554-42S3 • Facsimile: (415)255-0733 



~HlT" 



Attachment 1 1 
Page 2 5T: 2~ 
City and County of San Francisco Office of the City Attorney 

Letter to Harvey Rose 
Page 2 
November 4. 1 999 

Third, the trade packages that are to be paid for with public funds were advertised first 
and include a purchase contract for base isolators and flat jack seismic suspension, earthwork, 
trenching, paving and civil demolition; interior demolition; structural steel erection; and 
structural concrete erection. 

For the above publicly-funded work, the Commission worked with the HRC to establish 
MBE/WBE subcontractor participation goals and the HRC has reviewed the bids submitted to 
the Commission. The Commission has strictly complied with the procedures set forth under 
Chapter Six of the Administrative Code pertaining to public works contracting. Those include: 
a) advertising the work in the City's official newspaper and other trade publications; b) 
providing, at a minimum, fifteen days for the advertising of the bids; c) holding pre-bid meeting 
with the HRC's representatives present to review HRC requirements; and d) complying with the 
City's subcontracting listing procedures. Bid protests were allowed and responded to. And after 
a period of four months, the Commission has now awarded the above packages to DIS, Aman 
Construction Company, Ryan Engineering, Thyssen Dover Elevator Company, Bostrom Bergen 
and S.J. Amoroso respectively. The amount of those contracts total $40,610,768. 

It is my opinion that the Commission has performed the above lawfully and in full 
compliance with Chapter Six of the San Francisco Administrative Code. 

Very truly yours, 

LOUISE H. RENNE 
City Attorney 




DAVID L. NORMAN 
Deputy City Attorney 



DLN/d? 



1 For the purchase contract with DIS for S2,995,000 for base isolators and flat jacks, the HRC set 
no subcontracting goals because of the nature of materials being furnished. 



TO: 


Alan Gibson 


FROM: 


Ikuko Satoda 


DATE: 


November 17, 1999 


SUBJECT: 


File 99-2075 



Attachment III 



FrWIxj \SIA\ ART MUSEUM 

'AVJ FA' 1 OF SAN FRANCISCO 



This is a listing of all the bidders for each of the five contracts, and the amounts each 
one bid. 



CONTRACT BIDS 


BID PACKAGE 


STRUCTURAL DEMOLITION 


Bidders 
Bid Amount 


AMAN ICONCO 
3,998.000 4,541,000 
Awarded 


BID PACKAGE 


STRUCTURAL STEEL 


Bidders 
Bid Amount 


Bostrom-Bergen WW Steel 
17,981,798 '9 980 000 
Awarded 


BID PACKAGE 


STRUCTURAL CONCRETE 


Bidders 
Bid Amount 


S.J. Amoroso Conco 

13,497,400 15.030,568 
Awarded 


BID PACKAGE 


CONVEYING SYSTEMS 


Bidders 
Bid Amount 


Thyssen-Dover Montogmery 
1.360,000 2,661,000 
Awarded 


BID PACKAGE 


EARTHWORK. TRENCHING 


Bidders 
Bid Amount 


Ryan Aman 
788,570 988,000 
Awarded 



CHONC-MOON LEE CENTER 
FOR ASIAN ART AND ClLTl'RE 



18 



GOLDEN GATE PARK 

SAN FRANCISCO 

CALIFORNIA 

PHONE 

FAX 14151 ^> - 

TDD (415, -5::tv5 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 

Item 4 -File 99-2141 



Departments: 



Item: 



Department of Public Health (DPH) 
Department of Real Estate (DRE) 

Resolution authorizing amendments to two existing DPH 
leases of real property, for the Mental Health Division of 
the DPH. 



Location: 

Purpose of Lease 
Amendments: 



Evans Avenue between Mendell and Keith Streets. 



The proposed lease amendments would: 

• consolidate into one lease the two existing leases for 
the Mental Health Division of the DPH at 1307 and 
13 17-13 17A Evans Avenue; 

• add 691 square feet of additional office space for the 
Mental Health Division at 1309C Evans Avenue; and 

• set the termination date for the new lease at June 30, 
2003. 



Lessor: 

Lessee: 

No. of Sq. Ft. and 
Cost Per Month: 



John M. Holland IV, an individual landlord 
City and County of San Francisco 



The following table summarizes the existing and proposed 
lease arrangements: 





Square 


Monthly 


Rent/Sq. Ft 




Premises 


Feet 


Rent 


Per Month 


Lease Expiration 


Current Leases: 










1307 Evans Avenue 


7.19S 


S9,717.30 


SI. 35 


June 30, 2003 


1317-131 7A Evans Avenue 


501 


601.00 


$1.20 


Month-to-month 


Current Total: 


7,699 


$10,318.30 






Proposed Consolidated Lease: 










Proposed consolidated premises 


8,390 


$11,400.00 


$1.36 


June 30, 2003 


including 691 square feet at 










1309C Evans Avenue 











BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 

Additional Cost: 



Source of Funds: 



Percentage Increase 
Over Prior Lease: 



Utilities and Janitor 
Provided by Lessor: 



SI. 081. 70 per month, or S12.980.40 annually. 

FY 1999-2000 Substance Abuse and Mental Health 
Services Administration Block Grant from the California 
State Department of Mental Health 



The proposed lease amendments would result in: 

• an increase in space for the Mental Health Division 
of the DPH of 691 square feet or approximately 9 
percent, from 7,699 square feet to 8,390 square feet; 
and 

• an increase in cost to the City for annual rent of 
$12,984 or approximately 10.5 percent, from 

23,816 to S136.800 per year. 



Under the two existing leases, the Lessor pays all costs 
for utilities and janitorial services, except for separately 
metered electrical services which are the responsibility of 
the City. The proposed lease amendment would not alter 
this arrangement. 



Term of Lease: 



Right of Renewal: 
Description: 



According to Mr. Steve Alms of the DRE. the existing five- 
year lease at 1307 Evans Avenue, which is a five-year 
extension of a lease previously approved by the Board of 
Supervisors, commenced on July 1, 1998 and will expire 
on June 30, 2003. Mr. Alms states that the existing lease 
at 1317-1317A Evans Avenue is on a month-to-month 
basis in accordance with Section 23.19 of the 
Administrative Code which permits month-to-month 
leases for property which costs SI. 000 or less per month. 
Approval of the resolution would result in the conversion 
of the existing lease at 1317-1317A Evans Avenue from a 
month-to-month basis to a fixed expiration term of June 
30. 2003. 

None 

In 1993, the Board of Supervisors approved a resolution 
authorizing the DPH to lease portions of the ground and 
second floor of the building located at 1307 Evans Avenue 
for use by the Mental Health Division of the DPH 
(Resolution No. 586-93). In 1998, the DPH exercised its 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

20 



Memo to Finance and Labor Committee 

December 8, 1999 Finance and Labor Committee Meeting 



option to renew this lease for one additional term of five 
years, which expires on June 30, 2003. 

In addition, in November of 1998, the DPH began leasing 
space at 1317-1317A Evans Avenue on a month-to-month 
basis in accordance with Section 23.19 of the 
Administrative Code which permits month-to-month 
leases for property which costs $1,000 or less per month, 
according to Mr. Alms. 



Comments: 



Recommendation: 



1. Presently, the two leases provide 7,699 square feet of 
office space for the Mental Health Division of the DPH for 
46.5 full-time equivalent employees, at an average of 
approximately 166 square feet per employee. Under the 
proposed consolidated lease, the additional 691 square 
feet, which would increase the total space to 8,390 square 
feet, would accommodate the same number of full-time 
equivalent employees, at an average of approximately 180 
square feet per employee. The Attachment provided by 
Ms. Judy Schutzman of the DPH explains why the Mental 
Health Division needs an additional 691 square feet of 
office space. 

2. According to Mr. Alms, the proposed monthly rent of 
SI 1,400 represents fair market value. 

Approve the proposed resolution. 






BOARD OF SUPERVISORS 
BUDGET ANALYST 

21 




i W41 5-255-3405 

City and County of San Francisco 
Department of Public Health 
Population Health & Prevention 

COMMUNITY MENTAL HEALTH SERVICES 



Attachment 

Judith Schutzman 
Operations Manager 

1380 Howard Street 5th Floor 

San Francisco, CA 94103-2614 

(415)255-3405 FAX (415)255-3557 



MEMORANDUM 



Date: November 30, 1999 

To: Alan Gibson 

Board of Supervisors Budget Analyst 

From: Judy Schutzman 

Subject: File 99-2141 

This is in response to your request for additional information regarding Community 
Mental Health Services' lease on Evans Avenue. 

1 . The source of funds for the additional space is the Substance Abuse and Mental 
Health Services Administration (SAMHSA) block grant. This is an annual grant through 
the State Department of Mental Health. There is S1 36,800 available for office rental in a 
total grant for this program of $481 ,681 . 

2. These premises are used to house the Famiiy Mosaic Project, a program which 
serves severely emotionally disturbed children and their families. The expanded space 
will be used to house existing staff, six of whom were hired in the past six months. 
There are currently 43 FTE Civil Service staff and 7 part-time (3.5 FTE) graduate school 
interns housed in the existing space, an average of 165 square feet per person. The 
additional space will increase the average per person to 180 square feet 

In addition to confidential therapy offices, space is utilized for group and famiiy therapy 
and multi-disciplinary case conferences. Of necessity, these uses require more sauare 
footage than a purely administrative office environment. 

If you have additional questions, please give me a call. 

cc: Monique Zmuda 
Tony DeLucchi 
Steve Alms 



22 



Memo to Finance and Labor Committee 
December 8. 1999 Finance Committee Meeting 



Items 5 and 6 - Files 99-2185 and 99-2186 



Department: 
Item: 



Amount of Funds: 
Source of Funds: 

Budget: 



Superior Court 

File 99-2185 

Ordinance rescinding $23,643 budgeted in the Fiscal Year 
1999-2000 Superior Court budget for Professional 
Services and re appropriating said amount to Salaries and 
Fringe Benefits, and creating one new permanent 
Dependency Mediation Assistant in the Superior Court 
for Fiscal Year 1999-2000. 

File 99-2186 

Ordinance amending Annual Salary Ordinance for Fiscal 

Year 1999-2000 (Ordinance No. 209-99), creating 1.0 FTE 

0366 Dependency Mediation Assistant in the Superior 

Court. 

$23,643 

Reappropriation of Professional Services monies included 
in the Fiscal Year 1999-2000 Superior Court budget 

The budget for this proposed position, from November 1 of 
1999 through June 30, 2000, is as follows: 



0.625 FTE Dependency 
Mediation Assistant 

Fringe Benefits 
Total 



$19,379 

4.264 

$23,643 



The amendment to the Annual Salary Ordinance creating 
one new position would be as follows: 



Classification 



Title 



1.0 FTE 0366 Dependency 

Mediation Assistant 



Biweeklv 


Annual 


Step 1 Step 5 


Step 1 Step 5 


$1,800 $2,188 


$46,980 $57,10 



The annual cost of the proposed one new permanent 
position would range from $57,316 at Step 1, including 
$46,980 for salary and $10,336 for fringe benefits, to 



23 



Memo to Finance and Labor Commit i> 
December 8, 1999 Finance Committee Meeting 



$69,670 at Step 5, including $57,107 for salary $12,563 for 
fringe benefit 

Description: The Superior Court's Dependency Mediation Program is 

designed to promote cooperation and teamwork among 
the various parties involved in juvenile dependency cases 
and to reduce the adversarial nature of the proceedings. 
The Program promotes the active involvement of parents 
or guardians in creating treatment plans for themselves 
and their children. The goal of the Dependency Mediation 
Program is to reduce the number of contested hearings, 
and thereby, reduce the City's related court and social 
service costs. 

Currently, the Dependency Mediation Program is paying 
Parent Mediators, consisting of parents whose children 
were made dependents of the Court. Such Parent 
Mediators have successfully resolved those issues which 
led to the children's removal from care. The Parent 
Mediators are being paid on a contractual, as-needed 
basis serving as peer mediators and to educate other 
parents or guardians about the program. The Parent 
Mediators also provide assistance to professional 
mediators, who are required to have master's degrees and 
are skilled in conducting mediations, in the mediation 
process. 

The proposed ordinance would create a new permanent 
City classification, the Dependency Mediation Assistant, 
to perform the functions currently performed by the 
Parent Mediators. The Dependency Mediation Assistant 
would have received the training provided to Parent 
Mediators and gained experience in peer mediation while 
performing as a Parent Mediator. In addition, the 
Dependency Mediation Assistant would assume new 
responsibilities in coordinating parent orientations, 
community meetings, and family case development. 

The proposed ordinances would (a) reappropriate funds 
presently budgeted in the FY 1999-2000 Superior Court 
budget for Professional Services to fund the salary and 
benefits for one new permanent Dependency Mediation 



24 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 



Assistant (File 99-2185) and (b) amend tbe Annual Salary 
Ordinance, to create such position (File 99-2186). 

Comments: 1. The attached memorandum (Attachment I), provided 

by Ms. Kim Harmon of the Superior Court, provides 
background information pertaining to the Dependency 
Mediation Program and the justification for approving one 
new permanent position to replace the Parent Mediators 
who have been providing services to this program under 
contract. 

2. The Budget Analyst notes that actual expenditures in 
FY 1999-2000 for Parent Mediators, as of November of 
1999, are only $1,635. Actual expenditures for Parent 
Mediator contractual services in FY 1997-98 and FY 
1998-99 were $2,230 and $1,860 respectively. Therefore, 
based on actual expenditures of $1,860 in FY 1998-99, the 
estimated increased cost to the City of adding one new 
position is $67,810 ($69,670 less $1,860). 

3. Ms. Harmon states that a Parent Mediator, who 
successfully completed the training and has worked as a 
peer mediator on a contractual, as-needed basis for the 
Superior Court's Juvenile Dependency Mediation 
Program, has been selected as the Dependency Mediation 
Assistant, upon Board of Supervisors approval of the 
proposed ordinances. However, the new proposed position 
would not be filled until on or about January 2, 2000, at 
the earliest. 

4. According to Ms. Cheryl Martin of the Superior Court, 
the proposed new permanent Dependency Mediation 
Assistant would serve in a paraprofessional capacity, 
assisting professional mediators in the Unified Family 
Court, which is the court handling all family matters. As 
explained in Attachment II, provided by Ms. Martin, the 
salary rate was set at a salary range slightly below an 
1822 Administrative Analyst, the entry-level professional 
classification. Attachment II further explains how the 
classification and salary' range were determined. 

5. The Budget Analyst notes that approval of this new 
permanent position, to replace the Parent Mediators 



25 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 



under contract, would result in estimated increased costs 
to the City of $67,810 annually ($69,670 less $1,860). 
According to the Superior Court, justification for such 
increased expenditures, as Ms. Harmon states in the 
attached memorandum, is that "with the addition of the 
Dependency Mediation Assistant, we would be able to 
double our caseload, which would mean an average 
monthly savings of $23,473." According to Ms. Harmon, 
such cost savings would result from reduced trial 
preparation and trial costs due to settlement of cases in 
the Dependency Mediation Program. 

6. Based on a starting date for the proposed new 
permanent position of January 2, 2000, resulting in 13 
remaining pay periods, at a biweekly salary rate of $1,125 
per pay period (based on 0.625 FTE) the Budget Analyst 
recommends reducing the amount budgeted for 
Permanent Salaries by $4,754 and for Fringe Benefits by 
$1,046, for a total reduction of $5,800. 

Recommendations: 1. Amend the proposed ordinance (File 99-2185) to reduce 
the total funds requested of $23,643 by $5,800, including 
$4,754 for Permanent Salaries, and $1,046 for Fringe 
Benefits, resulting in a total recommended amount of 
$17,843. 

2. Amend the proposed ordinances to designate the 
requested one new permanent position as an "L" or 
Limited-Tenure position in order that this position can be 
re-evaluated by the Board of Supervisors during the FY 
2000-2001 budget review. 

3. Approval of the ordinances, as amended, is a policy 
matter for the Board of Supervisors. 



26 



Memo to Finance and Labor Committee 
December 8, 1999 Finance Committee Meeting 




cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakey 



27 



DEC 02 '99 04:07PM SUPERIOR COURT Attachment I P. 2/4 

Page 1 of 3 

Dependency Mediation Program 
San Francisco Unified Family Court 

400 McAllister Street, Suite 4C2 • San Francisco, CA 94102 • (416) 651-3912 • Fax: (415) 551-4002 

December 1, 1999 



Severin Campbell, Budget Analyst 
Budget Office, Board of Supervisors 
1390 Market Street, Suite 1025 
San Francisco, CA 94102 



Re: Dependency Mediation Assistant Position 

Dear Ms. Campbell: 

As you know, the Dependency Mediation Program of the San Francisco Unified Family Court 
provides mediation services to families whose children have been made dependents of the 
court. The population that this Program serves is, for the most part, in extreme poverty and, 
therefore, without the financial resources necessary to deal with the issues that have brought 
their children to the attention of "he court . The reasons for the children's involvement in the 
system can almost all be traced back to their parents' substance abuse, domestic violence, 
and/or mental health issues 

Cost Savinos to the Court for Proposed Job Creation 

The addition of the Dependency Mediation Assistant position will provide financial benefits to the 

court: 

1. Our current caseload is approximately 12 mediations per month. As we fully resolve 
around 80% of the case:; referred to our program and partially resolve another 12%, we 
would be saving the court close to double the amount of savings currently generated. 
(See attached Statistical Report for November 1999, p. 6, showing this Fiscal Year 
Savings* at 558,683.24, which is an average monthly savings of S1 1 ,737.00); 

With the addition of the Dependency Mediation Assistant we would be able tc double 
our caseload, which would mean an average monthly savings of $23,473.00. 

2. Our mediations are set up to be mediated by teams of two by necessity. The addition 
of a permanent position at the paraprofessional level will allow us to have a mediation 
team that includes a paraprofessional and professional mediator, rather than paying for 
two professional mediator. The hourly rate of pay requested for the Dependency 
Mediation Assistant is $26.84, including benefits. The hourly rate paid the professional 
contract mediator is 550.00 per hour, almost twice as much per hour. 

* "Savings are gross savings, prior to cost of program. However, tnese savings do not reflect savings to 
the DeplL of Human Services, or judicial and court personnel time freed up for other wofn and cases 



28 



DEC 02 '99 64: 03PM SUPERIOR COURT fllUC-imun J. p. 3/4 

Page 2 of 3 

3. From our relatively short experience, we are confident that the paraprofessional 
mediator's involvement will bring up the percentage of cases that fully resolve, thus 
increasing the monthly savings. On a number of occasions all of the attorneys and child 
welfare worker have specifically requested her participation because of the unique 
qualities she possesses and the way in which she is able to relate to very difficult clients. 

4. In addition to 12 hours per week (4 cases) spent in mediations, the Dependency 
Mediation Assistant would spend approximately 6 hours a week setting up and making 
presentations to community groups. She would spend the remaining 7 hours per week 
providing parent orientation and doing case development services in advance of the 
mediation sessions. 

History of the Dependency Med ation Assistant Position 

A few years ago Judge Hitchens and I discussed her idea for a pilot program. This pilot was 
specifically designed to address the needs of the parents of dependent children. These parents 
are often unable to work effectively with the "system" and feel hopeless and overwhelmed; 
factors that can greatly contribute to their inability to reunify with their children. 

Judge Hitchens and I believed tiat by incorporating a peer mediator (a parent whose children 
had been through the dependency system and who had successfully resolved the issues that 
initially brought her children to the attention of the court) that this Mediation Assistant would be 
able to: 

1 . Provide a role model for parents; 

2. Provide a sense of hope to parents; 

3. Provide reality testing to both parents and child welfare workers; 

4. Provide a link to the community from the court; and 

5. Provide education to parents about the mediation process, the dependency system, 

and community resources available. 

We selected candidates and provided a 40 hour training. We then began to use Nina McCarthy 
on an on-call basis. Initially, we were paying her $8.00 per hour, which was the rate we paid all 
of the potential candidates as they went through the training. Once Nina was chosen as our 
Mediation Assistant contractor in the summer of 1 998, she was paid $1 2.00 per hour for her 
work. 

As she has gained experience through her "on the job" training the value of the services she 
provides our program has become clearly apparent. Not only have her mediation skills improved 
with time, but she is also able to take on many more responsibilities related to the program as a 
whole. The value of what she brings to the program as a peer mediator cannot be duplicated by 
a professional mediator. 

In fact, San Francisco is the first juvenile dependency mediation program in the country to 
provide a Dependency Mediation Assistant. The idea has generated much excitement and 
discussion in the dependency mediation field when we have presented this aspect of our 
program at national conferences.. 



The Need to Create a Position in Place of a C ontractor Position 

We have concluded, without hesitation, that the pilot program Mediation Assistant has added 
tremendous value to the Dependency Mediation Program and, therefore, to the court and to the 
families and children we serve. In order to preserve the unique and irreplaceable attributes that 



29 



dec 02 '99 04:eaPii superior court Attachment I p. 4/4 

Page 3 of 3 

this peer mediator has been shown to provide, the contractor position should be institutionalized 
as a permanent position, for a number of reasons: 

1 . In order to successfully mediate juvenile dependency cases it is critical to establish 
and nourish trusting rela:ionships with attorneys and child welfare workers who 
participate in the mediation sessions. This is impossible without an ongoing and 
predictable presence at ;he courthouse; 

2. The "learning/competency curve" in providing dependency mediation services is quite 
steep. It is cntical that m sdiators have ongoing experience in order to build on the 
knowledge and skills of their prior work. This cannot be successfully accomplished on an 
on-call basis, 

3. The change from a contract services mediator to an employment position will allow for 
predictability for the staffing of mediations. This will give the program more flexibility with 
regard to meeting the court's needs, 

4. A predictable scheduling of mediators' time will also greatly improve our mediators' 
teamwork with each othe:r, which is a vital component of our co-mediation process; 

I hope that this information is helpful to you. Please let me know if I can be of any further 
assistance to you. I can be reacned at (415) 551-3912 




MON, Director 
ency Mediation Program 



Hon. Donna Kitchens 
Alan Carlson, Chief Executive Officer 
Cheryl K. Martin, Director, Human Resources 
Neal Taniguchi, Director, Fiscal Services 



30 



Attachment II 




Page 1 of 2 

Superior Court of California 

County of San Francisco 

Administrative Office 400 McAllister Street. Room 205. San Francisco, CA 94102-4514 (415) 551-5700 



November 30, 1999 



Severin Campbell. Budget Analyst 

Budget Office 

Board of Supervisors 

1390 Market Street, Suite 1025 

San Francisco, CA 94102 

RE: Establishment of a New Classification - Dependency Mediation Assistant, Superior Court 

of California, County of San Francisco 

Dear Ms. Campbell: 

You asked that the Superior Court supply you with additional information regarding the rationale 
for setting the salary for the requested Dependency Mediation Assistant in the Court. I offer the 
following information: 

The class will initially be used, and for the foreseeable future, for only one position. The incumbent 
will serve in a paraprofessional capacity, assisting professional mediators in the Unified Family 
Court who perform mediation sessions regarding juvenile dependency matters before the Court. 
The specific knowledge, skills and abilities we need for job performance as a Dependency 
Mediation Assistant will require that the incumbent have first-hand knowledge and experience of 
having children who were made dependents of the court, including being a successful participant in 
a recovery program. The incumbent should also know how to use court mediation in the juvenile 
dependency sector and have a knowledge of child abuse and neglect issues. No specific training or 
job experience is required beyond this criteria, however the experience gained given this criteria is 
substantial. Court mediators are required to possess a master's degree in a related field and should 
also be certified mediators. The cost to the court is greatly reduced in obtaining an assistant 
mediator to assist the certified mediators. In addition, this position brings to the court the first hand 
knowledge which other mediators do not possess and can provide an invaluable service to parents 
in the system. 

When determining the appropriate salary for such a position, we compared the respective 
knowledge, skills, abilities, and recruitment and retention requirements of this new. classification 
with existing classes in the Court. We determined that the requirements for specific experience in 
the dependency courts was a higher criteria than that of our entry and second level clerks. In 
addition, the independence under which this position would be required to operate in dealing with 
persons outside the court far exceeded those of clerical staff. The position was much more 
comparable to a lower level professional classification similar to an Administrative .Analyst. The 
Court does not currently use such a class, but one is planned soon in the reclassification project 
currently underway in the Court. In that classification plan, there will be two new classifications of 
Administrative Analyst. These classes are similar to the Administrative Analyst class used 

31 



Attachment II 
Page 2 of 2 



elsewhere in the City and County. Currently the salary for the city's Administrative Analyst class 
is $1.831 -$2,226 bi-weekly, which is reflected as salary schedule number 61.45 . This information 
was taken from the city's current Compensation Manual. The court's planned Administrative 
Analyst I classification intended for use in the court was used for comparison with the proposed 
Dependency Mediation Assistant. That salary is proposed at salary schedule number 61.10 and the 
range is $1,800 to $2,188. This amount is less than the city's counterpart. 

Although the court is currently paying substantially less than this proposed amount under a current 
contract, the contract amount should not be used for salary setting for a permanent classification. 
Until the program was tested, it was impossible to predict how the contractor would be fully used 
and what an appropriate salary level should be. In addition, when the contract was negotiated, the 
salary to be paid was based upon the incumbent being in training and not yet fully functioning. 
However, as the court is now contemplating a permanent appointment to perform the required 
duties, the new classification was reviewed properly in relation to other court classes. As a result, 
the proposed salary is appropriate when weighed with other existing court classes. 

I hope this information is helpful to you in establishing the new position for Dependency Mediation 
Assistant. 

If I can be of further use in obtaining approval of this position, pleases contact me at (415) 551- 
5725. 




Cheryl K. Martin 
Director, Human Resources 

Cc: Hon. Donna Hitchens 

Alan Carlson, Chief Executive Officer 
Kim Harmon, Dependency Mediation 
Neal Taniguchi. Director. Fiscal Services 



32 




City and County of £an Francisco 

Meeting Minutes 
, Finance and Labor Committee 

Members: Supervisors Leland Yee, Mark Leno 
Clerk: Mary Red 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102^*689 



Wednesday, December 15, 1999 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Mark Leno. 
Members Absent: Sue Bierman. 



Meeting Convened 

The meeting convened at 10:09 a.m. 

992220 [Reserved Funds, Mayor's Office] 

Hearing to consider release of reserved funds, Mayor's Office, in the total amount of SI, 2 18, 226 (Fiscal Year 

1999-2000 Budget), to fund the City's Millennium Safety plan to be participated by the Office of Emergency 

Services, the Department of Public Health, the San Francisco Police, Sheriff and Fire departments including 

the Emergency Medical Services. (Mayor) 

12/1/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst: Mathew Hymel. Mayor 's Budget Office: 

Supervisor Yee, Captain Alex Fagan. Fiscal Division. Police Department: Deputy Chief Gamble. Fire 

Department: Chief Deputy Jan Dempsey, Sheriffs Department: Supervisor Leno. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



992144 |Reserved Funds, Mayor's Office of Community Development] 

Hearing to consider release of reserved funds. Mayor's Office of Community Development, (1999 Emergency 
Shelter Grants Program: Resolution No. 109-99), in the amount of $28,416 to be used by the Metropolitan 
Community Foundation for its shower program for homeless men and women. (Mayor) 
1 1/18/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst: George Smith. Mayor's Office of 
Homelessness; Supervisor Yee; Supervisor Leno. 
APPROVED AND FILED by the following vote: 
Ayes: 2 - Yee, Leno 

Absent1Bierman DOCUMENTS DEPT. 



DEC 2 1 1999 

SAN FRANCISCO 
PUBLIC LIBRARY 



City and County of San Francisco 



Printed at 3:43 PM on I2/1&V9 



Finance and Labor Committee 



Meeting Winuli' 



December IS, 1999 



992159 [Civil Filing Fee Increase] 
Supervisor Becerril 

Resolution increasing civil Tiling and appearance fees (from S24 to S27) provided in Business and Professions 

Code Sections 6321, 6322 and 6322.1 for operation of the 1 a« I ibrary. 

11/22/w, Hid l\l I) AND ASSIGNED U Finance md I ■boi I ommittee 

Heard m Committee Speakers Harvey Rose, Budget Analyst, MarciaBell, Law library 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



992176 (Approving amendment to paratransit broker agreement to perform special transportation services such 
as subcontracting with van and taxi providers for door-to-door paratransit service for persons with 
disabilities! 

Resolution approving Amendment No °- to the Paratransil Brokei Agreement b et w e en the < u\ ami Cerenio 
Management (Jroup, extending the term of the agreement three months, at an additional cost not to exceed 
$3,752,622, for a total contract cost not to exceed S83.44n.4n] i public I unsportution C ommission) 
11/19/99, RECEIVED WD ASSIGN! Dtol inmceand I ibor Convninee 
Heard in Committee Speakers Harve) Rose Budget Analyst, Annette Williams \ll S/ Supervisor I 

Supervisor Leno. Ted Lakey, Deputy Cit) Attorney. Nicolas DeLancie, Attorney, Cerenio Management 

Senices; Bruce O . Chair. Paratransit Council 

REFERRED WITHOUT RECOMMENDATION b> the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



992203 | Authorizing PTC as grant recipient of funds on behalf of the Port for its Ferry Building project, to 
expand ferry service into and out of downtown San Francisco| 

Resolution authorizing the Public Transportation Commission to accept and expend $1,594,500 of Federal 
Interstate Transfer capital assistance for one Port of San Francisco capital project, excluding administrative 
overhead costs. (Public Transportation Commission) 
1 1/29/99. RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers Harvey Rose, Budget Analyst. Gail Bloom, Public Transportation 
Commission. 
RECOMMENDED by the following vote: 

Ayes: 2 - Yee. Leno 

Absent: 1 - Bierman 



992264 (Request to release S2, 723. 284 for the Downtown Ferry Terminal| 
Supervisor Katz 

Hearing to consider the release of S2, 723,1 S4 in reserved funds pending selection of contractors, for the 
Downtown Ferry Terminal project. 

12 G 99, RECETV1 n AND ASSIGNED to Finance and I .abor Committee Sponsor requests this item be scheduled for consideration at the 
December 15, 1999 meeting 

Heard in Committee. Speakers Harvey Rose, Budget Analyst: Gail Bloom. Public Transportation 

Commission 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 3:43 PM on 11 IM* 



Finance and Labor Committee 



Meeting Minutes 



December 15, 1999 



991811 [Ferry Building Lease and Negative Declaration] 

Resolution approving lease with Ferry Building Investors, LLC, for the rehabilitation of the Ferry Building 
(The Embarcadero and Market Street) as a mixed use project; approving Negative Declaration. (Port) 

(Final Negative Declaration adopted and issued October 1, 1998.) 

9/22/99, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 10/27/1999. 

1 1/3/99, CONTINUED. Continued to November 17, 1999. 

1 1/17/99, CONTINUED TO CALL OF THE CHAIR Heard in Committee. Speakers: Michael Levme 

Heard in Committee. Speakers: Debra Newman, Budget Analyst's Office; Paul Osmundson, Director, 

Planning and Development, Port; Supervisor Yee; Ted Lakey, Deputy City Attorney; Supervisor Leno; Molly 

Marshall, World Trade Club. Amended to add two Further Resolved clauses requiring specific written reports 

from the Port to the Board of Supervisors. New title. 

AMENDED. 

Resolution approving lease with Ferry Building Inve *ors, LLC. for the rehabilitation of the Ferry Building 

(The Embarcadero and Market Street) as a mixed use project; approving Negative Declaration; providing for 

specific written reports from the Port to the Board of Supervisors. (Port) 

(Final Negative Declaration adopted and issued October 1, 1998.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



992214 [Ballot Argument, Parks and Recreation Facilities and Properties] 
Supervisor Newsom 

Motion authorizing proponent's ballot argument in favor of Proposition A, a bond measure regarding parks 

and recreation facilities and properties. 

12/6/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Michael Farrah. Supervisor Newsom's Aide. Opposed: Lloyd Schlaegel. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



992215 [Ballot Argument, California Academy of Sciences] 
Supervisor Yaki 

Motion authorizing proponent's ballot argument in favor of Proposition B, a bond measure regarding 

California Academy of Sciences. 

12/6/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Patrick Kociolek, Director, California Academy of Sciences. Opposed: 

Lloyd Schlaegel. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 3:44 PSt 



Finance and Labor Committee 



Wetting Minutes 



December IS, 1999 



992154 (Suspension of Muni fares| 
Supervisor Newsom 

Ordinance approving the suspension of fares on Muni from December 31, 1999 at 8:00 p.m. to no later than 

6:00 a.m. on January 1, 2000. 

I 1 22 99, RECEIVED AND Assh , NED to Finance and I jbor Committee 

12/6/99, 1 I IRK A I (OKKM 1 1< >N Corrected page 1. line -1. delete "Note This entire section is new", ordinance does not amend a 

code 

Heard m Committee Speakers Har\e\ Rose. Budget Analyst, Michael Farrah, Supervisor Newsom't iidt 

Laura Spanjtan. MUNI. Supervisor Yet 
RECOMMENDED by the following wile: 

Ayes: 2 - Yee. Leno 

Absent: 1 - Bierman 



992196 [Reserved Funds, Department of Public Health| 

Hearing to consider release of reserved funds. Department of Public Health. (Fiscal Year 1999-2000 Budget I 
in the amount of 5270,000. to fund professional services to establish Parent Helpline Program, for the 
Children's Mental Health Initialise (Department of Public Health ) 
1 1/29/99, RECEIVED AND ASSIGNED to Finance and 1 abor Committee 

Heard in Committee Speakers lhir\e\ Rose Budget Analyst. Anne Okuha, [department of Public Health 
APPROVED AND FILED by the following %ote: 
Ayes: 2 - Yee, Leno 
Absent: 1 - Bierman 



992193 (Permitting non-City workers to perform work for the City because nnn-( its workers can perform 
work at a lesser cost than ( it > employees - Public Parking Management Serried at the Airport| 
Resolution approving the Controller's certification that Parking Management Services for San Francisco 
International Airport can practically be performed by private contractor at a lower cost for the year 
commencing July 1, 1999 than if work were performed by City employees at budgeted levels (Airport 
Commission) 

1 1/24/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee Speakers Han ey Rose. Budget Analyst. Jon Ballestros. Airport Amended to provide 
retroactivit} Ytu title 
AMENDED. 

Resolution approving retroactively, the Controller's certification that Parking Management Services for San 
Francisco International Airport can practically be performed by private contractor at a lower cost for the year 
commencing July 1. 1999 than if work were performed by City employees at budgeted levels. (Airport 
Commission) 
RECOMMENDED AS AMENDED by the following sote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 3:44 P\1 on I2I&V9 



Finance and Labor Committee 



Meeting Minutes 



December 15, 1999 



992194 [Permitting non-City workers to perform work for the City because non-City workers can perform 
work at a lesser cost than City employees - Employee Parking Management Services at the Airport] 

Resolution approving the Controller's certification that Parking Management Services for San Francisco 

International Airport can practically be performed by private contractor at a lower cost for the year 

commencing July 1, 1999 than if work were performed by City employees at budgeted levels. (Airport 

Commission) 

1 1/24/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Jon Ballestros, Airport. Amended to provide 

retroactivity. New title. 

RECOMMENDED. 

Resolution approving retroactively, the Controller's certification that Parking Management Services for San 

Francisco International Airport can practically be performed by private contractor at a lower cost for the year 

commencing July 1,1999 than if work were performed by City employees at budgeted levels. (Airport 

Commission) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



991869 [Approving amendment to the Post-Security Master/Retail Duty Free Concession Lease for the New 
International Terminal) 

Resolution approving Post-Security Master RetaiL'Duty Free Concession Lease between DFS Group L.P. and 

the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 

9/30/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

10/22/99, SUBSTITUTED. Substituted by Airport Commission 10/22/99, bearing new title 

10/22/99, ASSIGNED to Finance and Labor Committee. 

1 1/3/99, CONTINUED. Heard in Committee. Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Director, Airport; Supervisor Yee. 

Continued to November 10, 1999. 

1 1/10/99, CONTINUED TO CALL OF THE CHAIR 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Jon Ballestros, Airport; Supervisor Yee. 

RECOMMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



991564 [City Employees Commuter Check Benefits] 
Supervisor Ammiano 

Hearing to consider how to provide commuter check benefits to encourage public transit use by City 

employees. 

8/9/99, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Continued to January 12, 2000. 

CONTINUED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



City and County of San Francisco 



Printed at 3:44 I'M on IZ In VV 



Finance and Labor Committee Htttbtg Minutes December IS, Itf't 



992236 (Increasing Tenant Relocation Benefits| 
Supervisor Ammiano 

Draft ordinance (amends Administrative ( lode Section ? " 9A) concerning tenant rights in certain 
displacement, providing for relocation benefits of S4.500 to low-income, elderly and disabled tenants. 

(Amends Section 37.9A.) 

12/6/99, RECEIVED AND ASSK iNI DtO 1 inancc and Labor Committee Sponsor requests this matter be scheduled at the December 15, 

1999 meeting. 

Continued to Special meeting of December 20. I 999 
CONTINUED by the following \ote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



SPECIAL ORDER - 11:00 a.m. 



992015 [Family Child Care Providers! 
Supervisor Yee 

Hearing to consider issues faced by San Francisco Family Child (are prm iders. including receiving referrals 
from the San Francisco resource and referral agencies, reeeiv ing funds lor facilities upgrades and receiving 
professional/business development assistance 

99, Kl CEIV1 I) AND ASSIGNED to Finance and I abor Committee 
Heard in Committee Speakers Deborah Alwre: Director. Department of Children. Youth and Their 
Families. Supervisot Yee, Supervisor Leno, " /// Lightbourne, Director. Humai Mable Seta; Amy 

Yam. Lib Hut 
CONTINUED TO CALL OF THE CHAIR b\ the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Bierman 



ADJOURNMENT 

The meeting adjourned at 1:00p.m. 



City and Count) of San Francisco 6 Printed at 3:44 P\1 on 11 lb. V» 



>.25* 



i*h 




Public Library, Gov't Information Ctr.. 5 th Fir. 
Attn: Susan Horn, Dept. 41 



OF SAN FRANCISCO ^-^U Mb NTS DEPT. 

DEC 1 4 1999 
BOARD OF SUPERVISORS SAN FRANCISCO 

BUDGET ANALYST PUBLIC LIBRARY 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



December 10, 1999 

TO: .^Finance and Labor Committee 

FROM: ^Budget Analyst 

SUBJECT: JDecember 15, 1999 Finance and Labor Committee Meeting 

Item 1 - File 99-2220 

Department: Mayor's Office 

Police Department 

Sheriff 

Fire Department 

Department of Public Health 

Item: Hearing to consider the release of $1,218,226 reserved in the 

Fiscal Year 1999-2000 budget for the City's Millennium Safety 
plan. 

Amount: $1,218,226 

Source of Funds: General Fund 

Description: The Fiscal Year 1999-2000 budget, as finally adopted by the 

Board of Supervisors and the Mayor, includes a General Fund 
reserve of $1,218,226 for Millenium Event Safety to fund 
additional public safety and medical services for New Year's 
Eve 1999 and New Year's Day 2000. Mr. Matthew Hymel, the 
Mayor's Director of Finance has proposed a release of these 
reserved funds for the following departments and expenditures: 



Memo to the Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Proposed Allocation of Reserved Funds for Millenium Event Safety 



Department 



Overtime 
Expenditures 



Non-Salary 
Expenditures 



Total 
Expenditures 



Police Department 


$ 600,000 


$63,000 


$663,000 


Sheriffs Department 


228,482 


50,000 


278,482 


Fire Department 


116,282 


12,000 


128,282 


Public Health 


112.462 


36.000 


148.462 


Total 


$1,057,226 


$161,000 


$1,218,226 



A description of anticipated minimum expenditures for each 
department follows. 

Police Department 

The Police Department expended approximately $450,000 for 
Police overtime during the January 1, 1999 New Year's Eve 
celebrations. Deputy Chief of Police William Welch states that 
all leaves and days off have been canceled for the period of 6:00 
am December 31, 1999 to 6:00 am January 1. 2000 for all sworn 
and civilian personnel in the Police Department and that all 
Police Department personnel will be deployed for police services 
during that time. This deployment represents the Police 
Department's "minimum staffing" for the Millenium Event. 

Attachment 1 from Captain Alex Fagan, head of the Police 
Department's Fiscal Division, explains that the Police 
Department's minimum costs will be $600,000 for overtime and 
an additional $214,975 in other costs, for total expenditures of 
$814,975. Captain Fagan adds that, should public safety 
requirements for additional police personnel extend through 
January 2, 2000, as much as an additional $1,200,000 would be 
required for Police Overtime. 

The Police Department's total minimum expenditures of 
$814,975 exceed the proposed $663,000 amount allocated to the 
Police Department budget from the Millenium Event Safety 
reserve by $151,975. (See Comment 2.) 

Sheriffs Department 

Attachment 2, provided by Ms. Jean Mariani of the Sheriffs 
Department, describes the department's deployment plans for 
the period of December 30, 1999 through January 2. 2000. 



Board of Supervisors 

Budget Analyst 

2 



Memo to the Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Increased overtime staffing will be assigned to open the 
Treasure Island jail facility on a temporary basis to house a 
portion of the current Hall of Justice jail population to make 
room for new arrestees. In addition to staffing for a large 
number of arrestess and an increased jail population during the 
millenium celebration period, the Sheriffs Department plans to 
staff an emergency services unit to provide Police Department 
support. 

The Sheriffs Department's estimated cost for providing such 
staffing is $427,776 in overtime expenditures and $68,173 for 
non-salary costs (also detailed in Attachment 2) for total 
anticipated expenditures of $495,949 or $217,467 more than the 
$278,482 amount allocated from the Millenium Event Safety 
reserve. (See Comment 2.) 

Fire Department 

Ms. Debra Ward, Chief Financial Officer of the Fire 
Department reports that the following personnel will be 
assigned to extra duty for Millenium Event Safety between 
December 31, 1999 and January 1, 2000. 



Unit 



Prevention 
Investigation 
Suppression and 
Emergency Medical 
Services (EMS) 



Number 


of 




Firefighter 


Overtime 


Personr 


lei 


Expenditures 


16 




$8,912 


7 




4,512 


il 

114 




112.141 


137 




$125,565 



Total 

Of the 114 additional Firefighter personnel who will be 
assigned to Suppression and EMS, 22 will be assigned to staff 
or provide supervision for six additional ambulances. The total 
number of ambulances on duty will be 27, and ten Paramedic 
Captains will be assigned for supervision. Expenditures for 
materials, supplies and equipment are expected to total 
$12,000. Minimum Fire Department expenditures are therefore 
$125,565 for overtime and $12,000 for materials, supplies and 
equipment, for a total of $137,565 or $9,283 more than the 
allocation of $128,462 from the Millenium Event Safety reserve. 
(See Comment 2.) 

Board of Supervisors 
Budget Analyst 



Memo to the Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Comments: 



Public Health 

Ms. Monique Zmuda, Chief Financial Officer of the Department of 
Public Health, explains in Attachment 3 that minimum additional 
costs for increased medical services is $148,462. Additional 
overtime staffing will be used for Field Care Clinics, Jail Health 
Services, Urgent Care Services, Emergency Trauma Services and 
Surgical, Critical Care and Medical/Surgical service units. Ms. 
Zmuda adds that such cos*ts could increase beyond this estimate if 
the volume and severity of patient contacts is more than expected. 

1. In summary, total minimum expenditures for Millenium 

Event Safety will exceed the amounts allocated to each 
Department from the Millenium Event Safety reserve by $378,725 
as shown in the table below. 



Department 


Amount 

Allocated 

From Reserve 


Minimum 

Anticipated 

Expenditures 


Difference 


Police Department 
Sheriffs Department 
Fire Department 
Public Health 


$ 663,000 
278,482 
128,282 
148.462 

$1,218,226 


$814,975 
495,949 
137,565 
148.462 

$1,596,951 


$151,975 

217,467 

9,283 


Total 


$378,725 



As previously noted, the minimum anticipated expenditures shown 
in the table above could increase depending on the actual need for 
public safety and medical services during the millenium weekend. 

2. According to Mr. Hymel, the Mayor's Office of Finance 

intends to work with each of the departments to determine the 
extent to which actual excess expenditures related to public safety 
and medical services during the millenium weekend can be 
absorbed within their respective FY 1999-2000 budgets. Mr. Hymel 
adds that, regardless of expenditures for the millenium weekend, 
he currently anticipates the need for a supplemental appropriation 
for the Sheriffs Department for FY 1999-2000 because of deficit 
spending, primarily for sworn overtime costs. 

Recommendation: Approve the proposed release of $1,218,226 in reserved funds for 
Millenium Event Safety. 



Board of Supervisors 
Budget Analyst 

4 



Attachrnem 
Fage 1 or 




POLICE DEPARTMENT 

CITY AND COUNTY OF SAN FRANCISCO 

THOMAS J. CAHILL HALL OF JUSTICE 

BSO BRYANT STREET 
SAN FRANCISCO, CALIFORNIA 94103 



FRED H. LAU 
CHIEF OF POLICE 

December 9, 1999 



Mr. Ken Bruce 

Board of Supervisors Budget Analyst Office 

1390 Market Street, Suite 1 025 

San Francisco, CA 941 02 

Dear Mr. Bruce: 

As per your request, the estimated cost for providing police service for the New Year's 
celebrations planned for Friday, December 31, 1999 is S600,000. This cost provides 
2,000 sworn and civilian personnel for a projected average minimum of 6 hours of 
overtime at an average cost of S50.00 per hour. As a comparison, the past several New 
Year's celebrations have required 1,000 officers and civilian personnel at a cost of 
approximately $450,000.00. Our department's plan is designed to provide enhanced 
levels of staffing through January 2, 2000 if the situation dictates. Assuming the 
department remained at full deployment through January 2 n overtime costs could 
increase by an additional $600,000 for a total cost of SI. 2 million dollars. It should be 
noted that the plan is designed to allow the command staff to adjust the staffing based on 
the situation at hand. 

The 5600,000 covers the estimated overtime incurred to provide a minimum staffing for 
the 24 hours period commencing 0600 hours December 31, 1999. The department is 
plaiming to provide police services for 1 1 different venues, which includes: Union 
Square, Bill Graham's Civic Auditorium, Davies Symphony Hall, The Embarcadero, City 
Hall, Union Street, Polk Street, Castro Street, the South of Market area, Broadway area, 
Fisherman's Wharf, and the Metreon/Yerba Buena Gardens as well as to provide police 
support for any unplanned events. 



Attachment 1 
Pa?e 2 of 5 



Mr. Ken Bruce 

Board of Supervisors Analyst OSes 

Page 2 
December 9, 1999 



Enclosed arc DPW work order items and equipment totaling S58.981.00 to provide 
services at Pier 31 previously Pier 29. Wc expect an expenditure of an additional S4.000 
on disposal supplies for this venue. .Also enclosed is a breakdown of additional 
equipment purchased by this department for the New Year's celebration totaling 
S155.994. This department is working with the Mayor's Office to determine how this 
additional cost will impact the operating budget of our department 

If you have any additional questions concerning the above please feel free to contact me 
directly at 553-9177. 

Sincerely, 



.ALEX E. FAGAN 
Fiscal Division 



Enc. 



Property Control Division 

Supplies For New Year's Eve - COST SUMMARY 



Attachment 1 
Page 3 of 5 





ITEM 


STATUS 


COST 


Athletic Baas (For Mass Arrest Kits) 


Researching 


T3D 


Antiseptic Towelettes 


In Stock 


S42.00 


Arrest FormSFPD 80 


In Stock S40.on 




Batteries - Size D 


In Stock 


S3. 150.00 




3lack Markers 


in Stock 


S25.00 




Booking Gloves 


In Stock I S475.00 




Bullhorns In Stock | S14451 




Certificate of Release SFPD 1 34 In Stock 


S253 




Clipboards 


In Stock 


S41 




Ear Pluas 


In Stock 


sua 




Field Arrest Cards In Stock 


S50 




Fingerprint Pads 


In Stock 


s^oo 




First AJd Kits 


On Order S1 1.255 




Fiares 


In Stock S4.S31 




Flashlights 


In Stock S30.0Q0 




Flexcuffs & Cutters 


In Stock S24.947 




Floppy Discs 


In Slock 


S29 




Loud Hailers 


On Order 


S12.798 




Message Pads 


In Stock 


S125 




Pencils 


In Stock 


S3 




Pens 


In Stock 


S14 




Polaroid Cameras 


In Stock 


S1.3C5 




Polaroid Film 


In Stock 


S23.527 



s 



Property Control Division 

Supplies For New Year's Eve - COST SUMMARY 



Attachment 1 
Paqe 4 of 5 



ITEM 


STATUS 


COST 


Police Banner Taoe 


in StccK 


S57Q 


Post-It Noteoacs 1 In Stock 


S=a 


Property Receipt Forms SFPD 315 


In Stock 


S24 


Taoe Recorders 


In Stock 


5255 


(Taoe Cassettes 


In Stock 


5144 


Trash Bacs 


In Stock S170 


Video Cameras On Oroer 510.145 


Video Cassettes 


On Orcer 


S40 


Drinking Water - Individual 


in StccK 


SI. 213 


Water - Sterile 


In Stock 


S228 


Sreath of Life Resuscitator Baa 


In Stock S1.758 


Latex Gloves 


In Stock 


$43 


SofClinq Non-sterile Gauze 4"x75" On Order 


S117 


Gauze Socnaes Non-Sterile 


On Order S13 


Triangular Eandaaes Non-steriie 


On Order 


S213 


Ice Packs, Reusable 6" x 9" 


On Order 


S 122 


"Sam" solints 


On Order 


SI. 422 


Fire Extinguishers. 10lbs. 


On Order 


S6.445 


Locked Storage Bins On Order 54.637 








■ - 












TOTAL $155,964 



Attachment 1 
Page D of 5 



i O : ■ Captain 1 imothy Kettrich #1 696 

Commanding Officer Planning Division 

FROM: Officer Daniel A. Hampton #1793 

Planning Division 

Date: 9/29/99 

Subject: Costs for New Year's Special Event-D.P.W. WILL ORDER ITEMS BELOW 

1 . Pier 29, Building 606, and T.T.F., Marina Command $4,015.00 

• (7 generators, four 125 kw and three 40 lew). 

Cables and connections materials for all 5 sites. S2k per site. $10,000.00 

One electrician for Pier 29, 12 hours New Years Eve $705.00 

One electrician for Bldg 606, 12 hours New Years Eve $705.00 

25 tri-pod type flood lights at $45.00 each. $1 ,125.00 

60 light towers with 1 kw generators, at $343.00 each. $20,580.00 

Labor for electricians to prep 5 sites for equipment hook up.$1875 each $9,380.00 

55 gallon fuel barrels and hand pumps (refueling at 4 sites).S660 each S2,640.00 

TOTALS: $49,150.00 

Tents rented from Special Events Inc. $9,831 .00 

Total $58,981.00 

Sites: 

1 . Pier 29 Warehouse Deploy one 125kw and one 40 kw generator 

2. Pier 29 Tent Site 

3. Tenderloin Task Force Deploy one 40 kw generator 

4. Marina Command Deploy one 40 kw gen,, hardwire ten and van 

5. Building 606 Deploy 5wo 125 kw generators 

6. Police Academy Deploy one 125 kw gen., childcare 



Attachment 2 
Page 1 or 2 



SAN FRANCISCO SHERIFFS DEPARTMENT 

DEPLOYMENT PLANS FOR MILLENNIUM EVENTS 

DECEMBER 30 - JANUARY 3, 2000 



In preparation for the millennium events scheduled for December 3 I, 1999, the Sheriffs 
Department plans the following deployment activities in order to provide staff for the San 
Francisco Police Department and provide housing for up to 1000 arrestees: 

December 30, L999: A housing pod at CJ£8 will be moved to the Treasure Island facility to 
make 100 beds available for arrestees. Staff assigned will begin 12 hour shifts at 0600 on this 
date. Additional staff will be on duty beginning at 1600 HRS to provide increased Station 
Transfer picloips as needed should activities begin on this date. 

December 31, L999: .All Sheriffs Department personnel begin 12 hour shifts. One group will 
begin the shift at 0600 HRS. to set up the Hall of Justice basement for the housing of arrestees. 
Another shift will start at 0600 HRS. to complete the se: up of Pier 3 1 for the housing of 
arrestees. The majority of Sheriff s personnel will begin the 12 hour shift at 1800 HRS. 100 
Emergency Services personnel will be assigned to the Police Department for additional street 
security. 

January 1, 2000: The department will assess the actual numbers of arrestees to determine 
how to continue the safe housing of those who must remain in custody. Tnc Emergency Services 
personnel will be scheduled to report at 1800 HRS. for the continued support to the Police 
Department. Whether or not these personnel will be needed will be determined by the Police 
Department based on activities planned for January 1. 

January 2, 2000: If jail space allows, the department will begin to move prisoners from 
Treasure Island back to CJ;=8. Whether or not this will happen will be based on the number of 
arrestees, the overall jail population, and continued millennium related events If the Treasure 
Island facility can be closed on this date, Sheriffs Department personnel will begin rotating out of 
the 12 hour shift at 1600 HRS. 

January 3, 2000: Ail Sheriffs Department personnel should be on regular duty hours and 
normal shifts. Whether or not this will be possible wDl depend entirely on the number of arrestees 
still in custody and the overall jail population. 



(based on information available as of 12/6/99) 



10 



Attachment 2 
Page 2 of 2 



Description 


CJ#9 P 


er31 I 


-IOJ Total Qi 


jantity Unit Price Total Estimate 


Biohazard kits 




2 


4 


6 S 


50.00 S 


300 


Bolt cutters 


1 


1 


2 


4 


87.00 


348 


Bull horns 


2 


2 


2 


6 


25.00 


150 


Chain - feet 




100 


200 


300 


8.00 


2,400 


Cyclone fencing 






50 


50 


4e.oo 


2,300 


Fax machine 




1 


1 


2 


789.00 


1,578 


Film - packs 


25 


25 


100 


150 


14.81 


2,222 


Fire extinguishers 




4 


8 


12 


51.00 


612 


Flashlight batteries 


100 


100 


600 


800 


0.50 


400 


Flex cuffs 


400 


400 


1000 


1800 


0.44 


785 


Folding tables 18" x 5' 


8 


8 


20 


36 


130.19 


4,687 


Garbage bags - 13 gal 




50 


50 


100 


0.04 


4 


Garbage bags - 50 gal 




25 


100 


125 


0.25 


31 


Garbage dumpster/service 






1 


1 


1,000.00 


1,000 


Leg irons - sets 




2 


2 


4 


46.00 


184 


Mattresses 


10 


160 


325 


495 


49.09 


24,300 


Meals (Aramark) 


500 


1500 4000 


6000 


0.99 


5,940 


Padlocks w/master key 




3 


20 


23 


6.95 


160 


Paper towels - rolls 


100 


100 


200 


400 


0.74 


298 


Plastic chairs 


15 


25 


50 


90 


15.00 


1,350 


Plastic gloves - pairs 


400 


400 


400 


1200 


0.03 


41 


Polaroid cameras 


4 


4 


4 


12 


80.67 


968 


Portapotties 


8 




26 


34 


55.79 


1,897 


Porters 













8,383 


Sawdust - 2 cu ft sacks 




10 


10 


20 


2.04 


41 


Signs 




20 


30 


50 


10.00 


500 


Telephones - staff & arrestees 




13 


18 


31 n/a 




Toilet paper 




30 


400 


430 


0.32 


138 


Towels 


200 


200 


500 


900 


0.69 


623 


Videocameras 


1 


1 


1 


3 


678.13 


2.034 


Totals 










S 


63,673 


Allowance for phones 












4.500 


Grand Total 










S 


68,173 



11 



City and County of San Francisco 




Memo To: Ken Bruce 

Budget Analyst 

From: Moniaue 7m n^^ >1 

Chief Financial Officer 

Rs: Millennium Event Planning 



Attachment 1 
?ape I oi j~ 



Department of Public Health 

Mitchell H. Katz, M.D. 
Director of Health 




In response to the expected Millennium Event, the Department of Health has undertaken 
a comprehensive, department-wide planning process with other city agencies and private 
health providers in preparing its response. The overarching goal for this planning process 
is to ensure the health and safety of all San Franciscans and visitors during the four-day 
Millennium Cclcbrarion. This will.be achieved through a coordinated health response 
utilizing technical preparedness, health prevention messages, disaster preparedness and 
management, augmentation of current direct care services and the addition of DPK Field 
Care Clinics at several celebration sites. 

The planned medical services during the Millennium week-end arc as follows: 

Field Care Clinics - Three teams of interdisciplinary staff will augment the Rock 
Medicine medical intervention teams. The focus of the teams is to provide medical 
treatment and intervention on site, thereby preventing hospitalization or unnecessary use 
of the emergency denartment. The DPH field care clinics will be located at Mission 
Castro. Broadway/Chinatown, and the Embarcadero areas. Other field care clinics will 
be deployed in Union Square, Civic Center, Haight Ashbury and additional sites at the 
Embarcadero areas. These sites will be staffed by Rock Medicine and the Army. 

Jail Health Services - The Department will staff all of the City Jails, including the 
impromptu site set up by the Sheriff at the Pier 3 1 . 

Urgent Care Services - The SFGH Urgent Care Center, and a Pediatric Urgent Care 
center will be operational during the Millennium Event 

Emergency Services - The SFGH Emergency Department will be fully staffed for Level 
1 Trauma throughout the week-end. Patients will be triaged to alternative patient care 
areas if they do not need emergency services. 

Surgical Services and Critical Care and Medical/Surgical Units - Operating Rooms, 
Critical Care Units and Medical/Surgical tmhs will be fully functional during the 
Millennium period. 



(415) 554-2600 



101 Grove Street 

12 



San Francisco, CA &4102 



Attachment 3 
Pase Z or 3 



The total costs to staff these services will tienend upon the volume and severity of 
illnesses and injuries sustained during the week-end. The Department estimates 
minim um staffing costs at S148,000. The extent to which costs will increase beyond this 
estimate is not known at this time. If the volume and severity- of patient contacts is more 
than expected, then the Department wiil increase its s taffing throughout the week-end to 
adjust to the actual needs. 



TOTAL P.C3 

13 



Attachment 3 
Page 3 of T~ 



City and County of San Francisco 



Department of Public Health 



Mitchell H. Katz, M.D. 
Director of Health 



Department of Public Health 
Estimated Costs of Millennium Event Services 





Amount 


Operating Room 


22,718 


Critical Care Units 


10,128 


Medical-Surgical In-patient Units 


11,471 


SNF 


4,290 


1M In-patient Admitting & Holding Area 


9,507 


Radiology 


3,577 


3M Urgent Care Center 


17.780 


5G OS-GYN Triage 


10.884 


6M Pediatric Urgent Care 


4,525 


Emergency Department 


12,851 


Pharmacy 


1.447 


Psychiatry 


5,254 


Patient Discharge Center 


2,514 


Patient Information & Interpreter Services 


1,543 


Pier 29 / 850 3ryant Field Care Center 


14,632 


Castro Field Care Center 


5,188 


North Beach / Chinatown Field Care Center 


5,114 


Southeast Health Center Urgent Care 


2.489 


Public Health Nurse Coverage for Early Newoom Discharge 


250 


Total 


148,452 



(415) 554-2600 



101 Grove Street 
14 



San Francisco, CA 94102 
TOTFL P.Z2 



Memo to Finance and Labor Committee 

Decemberl5, 1999 Finance and Labor Committee Meeting 



Item 2 - File 99-2144 

Department: 

Item: 



Amount: 
Source of Funds: 

Description: 



Budget: 



Comments: 



Mayor's Office of Community Development (MOCD) 

Hearing to consider the release of previously reserved 
funds from the Emergency Shelter Grant Program, under 
the 1999 MOCD budget, in the amount of $28,416 to fund 
the Metropolitan Community Foundation's shower 
program for homeless persons. 

$28,416 

Previously reserved funds in MOCD's 1999 budget for the 
Emergency Shelter Grants Program 

On February 17, 1999, the Board of Supervisors approved 
the acceptance and expenditure of $891,000 under the 
Emergency Shelter Grants Program from the United 
States Department of Housing and Urban Development, 
of which $120,350 was placed on reserve for future 
projects, pending the provision by the MOCD of further 
budget details on the homeless services to be funded 
(Resolution No. 109-99). 

The subject resolution would authorize the release of 
$28,416 for the MOCD in previously reserved funds of 
$120,350 to be used for the Metropolitan Community 
Foundation, a non-profit agency, to fund its program to 
provide homeless persons with showers, clothing, snack 
foods, and toiletries in the weekends. According to Mr. 
Jon Pon of the MOCD, this program was established in 
March 1999 by the Metropolitan Community Foundation 
and provides services to between 90 and 100 homeless 
persons per weekend. Mr. Pon states that the subject 
grant of $28,416 would fund the shower program from 
November 1, 1999 to June 30, 2000. 

The Attachment provided by the MOCD contains a 
detailed budget to support the proposed expenditure of 
$28,416. 

1. According to Mr. Pon, the Metropolitan Community 
Foundation has previously received (a) $15,000 from the 
MOCD for FY 1998-99 for meal preparation services, (b) 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Memo to Finance and Labor Committee 

Decemberl5, 1999 Finance and Labor Committee Meeting 

$7,000 of previously reserved 1999 Emergency Shelter 
Grant Program funds for kitchen improvements for its 
meal program for homeless persons in the Castro 
community, and (c) $18,840 from the Federal Department 
of Housing and Urban Development's 1997 Community 
Development Block Grant Homeless Pool to fund its 
shower program between March 1 and October 30, 1999. 

2. Mr. Pon states that the shower program is operated at 
Mission High School under a Memorandum of 
Understanding between Mission High School and the 
Metropolitan Community Foundation. Mr. Pon estimates 
that 3,060 to 3,400 homeless persons will be provided 
with services between November 1, 1999 and June 30, 
2000. 

3. According to Mr. Pon, the MOCD has not yet provided 
any funds to the Metropolitan Community Foundation for 
the shower program expenditures incurred since 
November 1, 1999 by the Metropolitan Community 
Foundation. 

Recommendation: Approve the requested release of reserved funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Attachment 



USE OF EMERGENCY SHELTER POOL FUNDS 



Project Information 

The proposed funding will be used by the Metropolitan Community Foundation for its shower 
program for homeless men and women. In addition to providing showers at the Mission High 
School, the program distributes clothing and toiletries. The funding will allow the program to 
provide services through June 30, 2000. 



Proposed Budget 



Supervisor/Project Coordinator ($ J 8.00 per hoar 1 5 hours a week) $9,360 

Monitors (female and male) ($ 1 2.00 per hour lOhoursa week) 8.320 

Fringe Benefits (20%) 3.536 

Office Supplies 333 

Shower Supplies 1.666 

Nutritional Supplement 3.467 

Laundry Services 1.734 

TOTAL 528,416 



1 7 



t «-» _ — >:=»r 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 3 - File 99-2159 



Department: 
Item: 



Description: 



Trial Courts 

Resolution increasing Civil Filing and Appearance Fees 
provided in California Business and Professions Code 
Sections 6321, 6322 and 6322.1 for operation of the Law 
Library. 

The proposed resolution would increase the fees paid by 
all parties to a civil lawsuit, as provided in Sections 6321 
and 6322 of the California Business and Professions Code, 
from $24 to $27, a $3 or 12.5 percent increase. Under the 
proposed resolution, to become effective January 1, 2000, 
the San Francisco Trial Courts would be authorized and 
directed to collect the proposed $27 fee for each filing and 
appearance and to pay such collected fees to the Law 
Library to support the Law Library's operations. 

Ms. Marcia Bell of the Law Library reports that County 
Law Libraries are established in accordance with State 
law. According to Ms. Bell, State Business and 
Professions Code Section 6322.1 permits the Board of 
Supervisors to annually increase the Law Library civil 
filing fee by $3 per filing, as long as the increase is 
excluded from the definition of total civil filing fee. Ms. 
Bell advises that, if the fee increase was included in the 
definition of the total filing fee, the effect would be to 
reduce the portion of the total civil filing fee transmitted 
to the State Controller for deposit in the Trial Court Trust 
Fund. The intent of Section 6322.1 is to permit a Law 
Library fee increase without affecting the Trial Court 
Trust Fund. 

Mr. Neal Taniguichi of the Trial Courts reports that for 
unlimited jurisdiction civil cases, or cases which exceed 
$25,000, the total initial civil filing fees are currently 
$196 and for limited jurisdiction civil cases, or cases 
which are less than $25,000, the total initial civil filing 
fees are currently up to $101. Of these total civil filing 
fees, currently $24 are allocated to the Law Library for 
their operations. If the proposed resolution is approved, 
the civil filing fees which are allocated to the Law Library 
would increase by $3, from $24 to $27. Therefore, the 
total civil filing fees that are paid by all parties to a civil 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

18 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

lawsuit for unlimited jurisdiction civil cases would 
increase to S199 and for limited jurisdiction civil cases 
would increase up to S104. 

Comments: 1. Ms. Bell reports that Law Library civil filing fees were 

increased in January of 1996 by S3, from SIS to S21, and 
again one year ago, in January of 1999 by S3, from S21 to 
S24. Last year, when the fee increase was approved, Ms. 
Bell was not able to project how many years that the then 
S3 increase would provide adequate revenues to support 
Law Library operations. 

2. According to Ms. Bell, Law Library filing fees vary 
throughout the State. Ms. Bell reports that Sacramento 
will have the highest filing fees of $29 beginning in 
January of 2000 and, that if the proposed resolution is 
approved, San Francisco would have the second highest 
Law Library filing fees of $27 beginning in January of 
2000. Ms. Bell notes that Marin. Alameda, Santa Barbara 
and San Diego Counties will have filing fees of S26 and 
San Mateo and San Luis Obispo Counties will have filing 
fees of $25 in January of 2000. 

3. Ms. Bell projects that in FY 1999-2000, the Law 
Library will receive a total of approximately $1,289,132 of 
revenues from the current $24 filing fees. Ms. Bell 
estimates that the proposed $3 increase in civil filing fees 
will generate an additional $59,022 during the current 
fiscal year, or a total of $1,348,154 in revenues. Due to 
fluctuations in the number of filings during the year, on 
an annual basis, Ms. Bell expects the $3 increase in filing 
fees to generate an additional S 14 1.822 in revenues, or a 
total of $1,430,954. 

4. Ms. Bell advises that the proposed increased fees would 
be used by the Law Library to offset increased costs of 
legal publications, improve electronic services and to set 
aside funds for the Law Library's move from their current 
location in the Veterans Building to another facility m 
2002. 

5. According to Ms. Bell, although the Board of 
Supervisors must approve the proposed increase in fees 
for the flung fees for the Law Library, in accordance with 
State law, the civil filing fee revenues that are generated 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

from sucb fees are disbursed by tbe Law Library Board of 
Trustees and are not subject to appropriation approval by 
the Board of Supervisors. As shown in the Attachment, 
the Law Library is projected to receive a total of 
$1,478,321 of Non-General Fund revenues in FY 1999- 
2000, of which an estimated $1,348,154, if the proposed 
resolution is approved or 91 percent, would be generated 
from these filing fees. Ms. Bell advises that all of these 
$1,478,321 revenues are subject only to appropriation 
approval by the Law Library Board of Trustees. However, 
the Budget Analyst notes that the projected Non-General 
Fund revenues of $1,478,321, which includes the proposed 
$3 increase that is projected to generate $59,022 in FY 
1999-2000, would result in $96,953 more than the Law 
Library's budgeted Non-General Fund expenditures of 
$1,381,368. In response, Ms. Bell advises that she has not 
revised the FY 1999-2000 budget to reflect unanticipated 
expenses of approximately $40,000 for temporary 
employees to replace two employees currently on 
catastrophic leave and two other employees currently on 
maternity leave. 

In addition, an annual General Fund appropriation to 
support the Law Library is approved by the Board of 
Supervisors, which totaled $393,713 in FY 1999-2000. 
Ms. Bell advises, that the General Fund contribution is 
primarily used to support three Law Library positions, 
and Department of Technical Information Services (DTIS) 
activities. If the proposed resolution is approved, the 
revenues generated for the Law Library will total 
$1,872,034 ($1,478,321 in fees, interest and miscellaneous 
income plus $393,713 in General Fund revenues). 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

20 



Attachment 



Di'c-08-99 12:03 San Francisco Law Library 



Law Library Budget FY 1990-00 
(Non-General Fund) 



Filing Foe Income: 

Supenor Court 
Municipal Court 
Total Filing Fees 

Miscellaneous Income: 
Interlibrary Loan Fees 
Investment Interest 
Checking & Savings Interest 
Copiers & Fax 
Miscellaneous 

Total Miscellaneous Income 
Total Revenue 

Operating Expenses: 

Salaries 

Health Insurance 

Retirement Fund 

Books & Multimedia Materials 

Bookbinding 

Contract/Consultant Services 

Furniture & Equipment 

Insurance 

Library Systems Maintenance 

Materials & Supplies 

Miscellaneous 

Payroll Taxes 

Postage & Delivery 

Public Relations 

Rent Branch 

Repairs & Maintenance 

Training & Prof. Affiliations 

Westlaw Expenses 

Automation Project 

Total Expenses 



Original Budget 

934,006 

355,126 

1.289.132 



Estimated 
$3 Increase 



59.022 



Revised Budget 



1.348.154 



66.617 

40.250 

700 

21.900 

500 

130.167 

1,478,321 



430.937 

48.157 

54,000 

505.110 

12,000 

13,200 

3.923 

16,390 

29.260 

4.500 

2.700 

30.000 

1.000 

2.000 

60.000 

500 

14,000 

1.000 

152.151 

1.381.368 



21 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 4 -99-2176 



Department: 
Item: 



Purpose of 
Amendment: 



Extended Term: 
Additional Cost: 
Source of Funds: 



Description: 



Public Transportation Commission (PTC) 

Resolution approving Amendment No. 9 ' to the 
Paratransit Broker Agreement between the City and 
Cerenio Management Group (CMG), extending the term 
of the agreement three months, at an additional cost not 
to exceed $3,752,622, for a total contract cost not to 
exceed $83,440,401. 



To extend the existing Paratransit Broker Agreement 
between the City and Cerenio Management Group (CMG) 
for three months, from January 1 to March 31, 2000. The 
subject extension would permit the Public Transportation 
Commission to complete the selection process of a 
Paratransit Broker for a new five-year contract without 
interrupting existing paratransit sendees. 

January 1 to March 31, 2000 (three months) 

Up to $3,752,622. 

Funding for the subject contract extension comes from the 
same five sources of the total contract cost of $83,440,401. 
The five sources annually contribute the following 
percentages of funding for the Paratransit Broker 
Agreement: General Fund (41 percent); San Francisco 
County Transportation Authority (44 percent); 
Commission on the Aging (5 percent); State Transit 
Assistance (4 percent); and Bay Area Rapid Transit (6 
percent). For this contract extension, the General Fund 
would pay for $1,538,575 (41 percent) of the total cost of 
$3,752,622 which was previously approved in Muni's FY 
1999-2000 budget. 

Paratransit services are door-to-door taxi and van services 
for City residents who have difficulty in using Muni and 
who are elderly or disabled and are certified for such 
services based on Americans with Disabilities Act 
eligibility criteria. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

22 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



On June 17, 1991, the City entered into a five-year 
Paratransit Broker Agreement with Cerenio Management 
Group (CMG), a private company. The Agreement 
commenced on October 1, 1991 and was due to expire on 
June 30, 1996. Under the Agreement, CMG performs 
special transportation services including subcontracting 
with van and taxi providers for door-to-door paratransit 
service for persons with disabilities. The term of the 
Agreement was subsequently extended by three years to 
June 30, 1999 to ensure a smooth implementation of the 
paratransit service requirements of the Americans with 
Disabilities Act. 

In November of 1998, Muni issued a request for proposals 
for a new 5-year Paratransit Broker Agreement, for the 
period beginning July 1, 1999 through June 30, 2004. 
Three companies submitted proposals and two of the 
companies, CMG (the current contractor) and Intelitran, 
were selected as finalists by Muni. In February 1999, an 
evaluation committee appointed by the PTC and 
consisting of two consumer representatives, two transit 
professionals outside of San Francisco, and one Muni 
representative scored each proposal (Attachment I 
contains a list of the persons appointed to the evaluation 
committee). The scoring process resulted in a very close 
point spread between the two bidders with CMG receiving 
the greater number of total points (CMG=821 points; 
Intelitran=811 points), but with Intelitran receiving a 
higher rating by a majority of the committee members. 
According to Ms. Annette Williams of Muni, as a result of 
the close point spread between the two proposers. Muni 
initiated contract negotiations with both bidders and 
requested each bidder to propose measures to address the 
weaknesses that were identified by the evaluation 
committee. Based on the results of the contract 
negotiations. Muni staff recommended that Intelitran be 
awarded the contract . 

However, according to Ms. Williams, in order to ensure a 
fair selection process, the Public Transportation 
Commission (PTC) directed that a new evaluation team, 
including an additional consumer representative, to re- 
evaluate the proposals and all additional materials 
submitted by each proposer as part of the earlier 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

negotiations. In July 1999, the second evaluation 
committee reviewed the proposals and also recommended 
that the contract be awarded to Intelitran (Intelitran=929 
points; CMG=865 points). (Attachment I also contains a 
List of the persons appointed to the second evaluation 
committee). 

Meanwhile, the term of the current Agreement with CMG 
was extended by the PTC for four months, from July 1, 
1999 to October 31, 1999, and subsequently for an 
additional two month period, from November 1, 1999 to 
December 31, 1999, in order to permit completion of the 
selection process of a contractor for a new five-year 
Paratransit Broker Agreement. 

Ms. Williams advises that to date the PTC has not made a 
decision on the award of a new 5-j r ear Paratransit Broker 
Agreement. Therefore, the PTC is requesting the subject 
three-month extension, from January 1, 2000 to March 
31, 2000. According to Ms. Williams, the requested 
amendment to the Agreement should provide the PTC 
with the time required to select a contractor for the new 
5-year Paratransit Broker Agreement which was 
originally to be effective July 1, 1999 and allow a smooth 
transition between contractors, if necessary, without 
interrupting existing paratransit services. 

The proposed extension would bring the total term of the 
current Agreement with CMG to eight years and nine 
months. Under the proposed resolution, additional costs 
are not to exceed $3,752,622 for the three-month 
Agreement extension, for a total contract cost not to 
exceed $83,440,401 for the total five years and nine 
months term of the Agreement with CMG. 

Budget: The proposed amendment to the current Paratransit 

Broker Agreement provides for pa} r ment of up to 
$3,752,622 to CMG. According to the PTC, the total cost 
to provide paratransit services during the 3-month period 
from January 1, 2000 to March 31, 2000 is estimated at 
$3,570,298. The proposed amendment would also pay 
CMG up to $31,824 for increased costs for rent, salaries 
and insurance incurred by CMG during the two-month 
period of the prior contract extension (November 1, 1999 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2k 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

to December 31, 1999). (See Comment No. 1). In addition, 
up to $150,500 would be provided, if necessary, to pay for 
CMG's lease for the 7-month period from April 1, 2000 to 
September 31, 2000, which is bevond the term of the 
subject Agreement extension (See Comment No. 2). 

A budget for the Agreement amendment of $3,752,622 is 
as follows: 

Prior Agreement Amendment 
Sovember 1. 1999 to December 31. 1999 

Increased lease costs (2 mos. % $5,000/mo.) 510,000 

Increased salaries (2 mos. @ S8,712/mo.) 1 7,424 

Increased insurance costs (2 mos. <2> $2.200/mo.) 4,400 

Subtotal $31,824 

Proposed Agreement Amendment 
Januan 1. 2000 to March 31. 2000 

Total contract costs to provide paratransit services 3,570.298 

for the three month extension 

Post-Proposed Agreement Amendment 

April 1. 2000 to September 31. 2000 

Balance of CMG lease payments (7 mos. @ S21,500/mo.) 150.500 

TOTAL S3. 752.622 

Comments: 1. According to Ms. Williams, the Public Transportation 

Commission has agreed to pay CMG for increased rent 
(see Comment No. 2), an 11 percent increase in CMG 
administrative salaries, and increased insurance costs 
under the prior extension of the Paratransit Broker 
Agreement for the two-month period from November 1, 
1999 to December 31, 1999 because CMG would not agree 
to the subject contract extension through March 2000 
without the assurance that their administrative cost 
increases since November 1999 would be paid, as 
explained in the memo from Ms. Williams shown in 
Attachment II. 

2. According to Mr. Steve Alms of the Department of Real 
Estate, CMG's lease for its office space at 5 Freelon Street 
expired on September 31, 1999. Mr. Alms advises that 
the minimum lease renewal permitted by the landlord 
was one year, commencing November 1, 1999, at a 
monthly rate of $21,500 which is S5.000 more than the 
previous monthly rental rate of $16,500. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Under the proposed Agreement extension, in addition to 
reimbursing CMG for the monthly rental pa3*ments for 
the subject extension period of January 1, 2000 to March 
31, 2000, the PTC would agree to: (a) reimburse CMG an 
additional $10,000 ($5,000 per month) for increased 
rental costs during the prior two-month Agreement 
extension from November 1, 1999 to December 31, 1999, 
and (b) pay CMG an additional $150,500 ($21,500 per 
month) for the seven-month balance of the lease from 
April 1, 2000 to October 31, 2000, bevond the term of the 
subject Agreement extension which the PTC has 
determined to be, "...a reasonable choice considering the 
importance of the paratransit service," as stated by Ms. 
Williams in Attachment II. According to Ms. Williams, 
such lease payments would only be made if the landlord 
does not agree to find a new tenant to lease the property 
during this period. Furthermore, Ms. Williams states that 
given the strong real estate market in the area, it is 
anticipated that the landlord would be willing to re-lease 
the property. 

3. Ms. Williams reports that, of the $3,752,622 for the 
Agreement extension, $3,085,080, or approximately 82 
percent, is designated for payment to the subcontractor 
van and taxi companies as identified in Attachment III, 
provided by Ms. Williams. The remaining $667,542, or 
approximately 18 percent, is for CMG's administrative 
costs. 

4. The Budget Analyst raises the following concerns about 
the proposed Paratransit Broker Agreement between the 
City and CMG: (1) the PTC has still not awarded the new 
5-year Agreement and the current Agreement with CMG 
has previously been extended twice (for a total of seven 
months) in order to allow time for the PTC to select a 
contractor even though two previous selection reviews 
have resulted in the recommendation that Intelitran be 
awarded the contract; (2) the proposed Agreement 
extension would retroactively pay CMG $31,824 for rent, 
salary, and insurance costs incurred during a prior 
Agreement extension at rates higher than those agreed to 
under that prior extension; and (3) the proposed 
Agreement extension would pay CMG $150,500 for the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

seven-month balance of its lease from April 1, 2000 to 
October 31, 2000, a period which is bevond the term of the 
subject Agreement extension. Therefore, the Budget 
Analyst considers approval of the proposed resolution to 
be a policy matter for the Board of Supervisors. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Attachment I 



Paratransit Broker Services Contractor Selection 



Committee #1 

1. Griffith Humphrey, Paratransit Coordinating Council 

2. Karen Young Simmons, Paratransit Coordinating Council 

3. Ann Flemer, Metropolitan Transportation Commission 

4. Priscilla Kays, Sacramento Regional Transit 

5. Nancy Whelan, MUNI 



Committee #2 

1. Vincent Behan, Paratransit Coordinating Council 

2. Debbie Mackin, Paratransit Coordinating Council 

3. Laurie Hodas, Paratransit Coordinating Council 

4. Cynthia Petersen, Golden Gate Transit 

5. James Albert, MUNI 



28 



.^ttachrnent II 



San Francisco Public Transportation Department 



949 Presidio Avenue. San Francisco. CA 94115 415.573.6854. 




MEMORANDUM 

To: Mouique DcJoug 

Budget Analyst Office 

From: Annette Williams Ar 

Accessible Services 

Date: December 8. 1999 

Subject: Paratransit Broker Contract Extension 



The purpose of this memo is to explain the administranve cost increases authorized by the PTC 
retroactively ibr Ccrcnio Management Group (CMG) for the period of November 1 - December 
30, 1999. CMG would not agree to an extension of their contract through March without the 
assurance that their administrative cost increases since November, 1 999 would be covered. The 
increases were negotiated with CMG in order to guarantee that paratransit service in San 
Francisco would not be interrupted. They represent actual cost increases incurred by CMG to 
extend their services until March 2000. and will be paid based on verified expenses incurred. 



Based on analysis of market trends in the South of Market area conducted by the Real Estate 
Department, rent increases for CMG have been deemed reasonable. Signing a one-year lease is 
assessed as a reasonable choice considering the importance of the paratransit service. CMG has 
repeatedly stated that the landlord would accept no less than a one year lease. Interruption of the 
paratransit service is not a viable opuon. 



The CMG salary increases are based on the salary levels proposed by CMG for a new five year 
contract. The term of the new contract should have begun in July 1999, per the RFP schedule. 
CMG stated that they could not retain their employees through the contract extension period 
without these increased salary levels. 



29 



Attachment III 



Please iind below a list oflhe van and taxi company subcontractors used by CMG, as per your 
reuuest. 



Van: 

MV Transportation 

iPS/Laidlaw 

Delancey Street Foundation 

Centra Latino 

John King Senior Center 

Kimochi 

Shanti 

Continuum HIV Day Services 



Taxi: 

Yellow Cab 

Luxor Cab 

DeSoto Cab 

National Cab 

Town Taxi 

SerraCab 

Pacifica Cab 

Colma Cab 

Black and White Checker Cab 



\Sprcsidio\Acccss$'.GROt^'S'\A(' , (:.SHKV\DArA'J'ARATRAN''iRF?' > 2000:ttr i .bu<lgct analyst oflitc.doc 



30 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Items 5 and 6 - Files 99-2203 and 99-2264 



Departments: 



Public Transportation Commission (PTC) 
Port 



File 99-2203 



Item: 



Amount: 
Source: 

Required Match: 
Grant Award Period: 



Indirect Costs: 



File 99-2264 



Item: 



Amount: 



Resolution authorizing the Public Transportation 
Commission to accept and expend $1,594,500 of Federal 
Transit Administration Interstate Transfer Capital 
Assistance grant funds to fund a construction contract for 
the Port's Ferry Terminal Project. 

$1,594,500 

Federal Transit Administration (FTA) 

$281,382 

According to Ms. Gail Bloom of the Public Transportation 
Commission (PTC), there is no date by which the FTA 
grant monies must be expended. 

Although the FTA allows for the inclusion of indirect 
costs, the PTC is requesting a waiver of indirect costs so 
that the entire grant amount of $1,594,500 can be used 
for direct project costs. 



Hearing to consider the release of reserved funds in the 
amount of $2,723,184 to fund a construction contract for 
the Port's Ferry Terminal Project. 

$2,723,184 



Source: California Transportation Commission 

Files 99-2203 and 99-2264 



Description: 



The Port's Ferry Terminal Project is an approximately 
$13,457,437 capital improvement project, which includes 
constructing a new South Terminal, relocating the 
existing North Terminal, constructing a breakwater, and 

BOARD OF SUPERVISORS 
BUDGETJjANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

expanding the existing berthing docks. This project would 
make the Port's Ferry Terminal the hub for increased 
ferry service in the Bay Area. 

The subject $1,594,500 FTA grant is the final of four FTA 
grants, totaling $6,344,500, received by the City to be 
used for the Port's Fern- Terminal Project (Files 98-62, 
99-1431, and 99-2018). 

The subject $2,723,184 reserved funds, which come from a 
California Transportation Commission grant for capital 
improvements for the Port's Ferry Terminal, were placed 
on reserve by the Board of Supervisors in May of 1993, 
pending selection of a contractor and submission of 
budget details (File 144-98-4). 

Budget: A summary budget for the Port's Fern- Terminal Project 

is as follows: 

Relocation of the North Terminal, 

Construction of the new South 

Terminal, and Dock Expansion $10,089,696 

Breakwater 3.367.741 

Total $13,457,437 

The requested grant funds of $1,594,500 and the release 
of reserved funds of $2,723,184 would partially pay for the 
costs of the $13,457,437 Ferry Terminal Project. 

Comments: 1. According to Ms. Veronica Sanchez of the Port, the 

Port has received a total of $13,457,437 in Federal and 
State funds, including $6,344,500 in Federal funds and 
$7,112,937 in State funds, for the Port's Ferry Terminal 
Project. Attachment I, provided by the Port, lists the 
funding sources in the amount of $13,457,437 to support 
the Port's Ferry Terminal Project, including the subject 
grant funds of $1,594,500 and the previously reserved 
funds of $2,723,184. 

2. Ms. Sanchez states that the Port will award a 
construction contract in the amount of $10,089,696 to 
Miller Thompson Constructors, which submitted the 
lowest bid in a competitive bidding process, upon Board of 
Supervisors approval of the proposed resolution and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

release of reserved funds, and Port Commission award 
and Controller certification of the construction contract. 

3. Ms. Sanchez states that the $2,723,184 in reserved 
funds would be expended on construction of the North and 
South Ferry Terminal floats and ramps, as shown in 
Attachment II, as part of the $10,089,696 construction 
contract. 

4. Ms. Sanchez states the required match to the 
$1,594,500 FTA grant in the amount of $281,382 would be 
provided by California Transportation Commission funds, 
which are part of the $13,457,437 in total funding for the 
Port's Ferry Terminal Project, as explained in Attachment 
I. 

5. Attachment III is the Grant Application Information 
Form prepared by the PTC. 

6. The PTC has filed a copy of the Disability Access 
Checklist with the Clerk of the Board of Supervisors. 

Recommendation: Approve the proposed resolution (File 99-2203) and 

release the requested reserve for $2,723,184 (File 99- 
2264). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



>E:C 03 "?3 05:20PM PORT 



~"-i Or S~ EXECUTIVE 



At ~acr.rr.er: t I 
P. 2^2 



PORT OF SAN FRANCISCO 







DOWNTOWN FERRY TERMINAL CONSTRUCTION CONTRAC 






1. FUNDING SUMMARY 



F TA Section 3 (formerly Sec. 1 064 ) 
FTA Section 9 ( formeiiy STP-G) _ 
FTA Section 9 ( formerl y fTEA#2 ) _ 

FTA Title 23 

FTA Sec. 3 



2.400,000.00 
1.000.000.00 



California Transportation Commission 



350.000.00 
1.594,500.00 ' 



500,000.00 



5,344,500.00 



7,112,937.00 



Total Funds Available for Construction , 


i S 


13,457.437.00 




^ 


















2. CONSTRUCTION COSTS 


i 






Base Bid-Miller/Thompson 


s 


10,089.696.10 




"Note: $2.7 million of Reserved Funds 


K 






for North Terminal are included in base bid. 


/ 




- j- 








Balance of funds Available for Alternative j 
Bid Item #4 -Breakwater Construction 


$ 


3,357,740.90 | 




(S3.S million cost) 


, 










































| 








i 






L 









'.2/a/99BuQget Anarystrer.2S9.x:s 



I2/3S/1999 16:66 415-554-7751 

DEC 23 '93 B4:31PT1 PORT OF SF EXECUTIVE 



SUPERVISOR YEE 



Attachment II 



PROJECT BUDOET. 


DOWNTOWN FERRY TERMINAL 


i : \ 


North Terminal 


Qrydock & Refurbish I 


5 


100,000 t I 


Float Fend-ring 1 S 


O.500 I I 


New Ramp aysism | $ 


60,500 ! I 


Float Ctnopy_ 


$ 


240.000 | ! 


Remove piles j $ 


5,000 I 


Nsw Gindepiles 


S 


160. ODD I 


Relocate Float I $ 


30,000 | 


Hinged Access Ramp (gangway) I $ 


100,000 I I 


Hiirtged Access RamD Canopy i$ 


155,000 I | 


Fender Dolphins 


s 


100,000 I I 


| 


I 


Subtotal 


s 


1,0X0,000 


I 


OH &P (1.2x1.1) | 


s 


332,500 | | 




North Terminal Float & Ramp 


$ 


1,372,500 | I 


! I 


South Ttrmlntl 


New Float 




N/A I lOther funding source 


rendering i 


s 


50,000 | I 


GuidepHac 


5 


' 235,500 | | 


Fender Dolphins 


s 


100,000 I | 


Hinged Access RamD i $ 


100,000 I .1 


New Ramp System j S 


100,000 


I . 


Float Canopy j $ 


230.000 


I 


Ramp Canopy I 




N/A I |Other funding source 


I I I 


Subtotal | 


s 


835,500 I 


OH&P 


s 


257,360 | | 


I 


South Terminal Float & flamp 


s 


1,102,860 | | 




Comblntd Totals 


s 


2,475,660 I I 


I 


10% Contingency 


s 


247,555 I | 




I 


Total Cost 


2,723,226 I | 


I I t 


i M 


AVAILABLE PUMD9 


CTC Prop 116 


s 


2,723.164 | i 


Matchmg Federal Funds 


$ 


42 ! I 


(Federal Transit Authority) 




I I 


Total Funds Available 


$ 


2.72a,226 I I 



Port of San Francisco 



12/3/99 



Attachment III 
GRANT APPLICATION INFORMATION FORM 

A document required to accompany a proposed resolution 
Authorizing a Department to Apply for a Grant 

To: The Board of Supervisors 
Attn: Clerk of the Board 

The following describes the grant referred to in the accompanying resolution: 

Department: 35 Public Transportation Commission - MUM 

Contact Person: Gail Bloom Telephone: ai5» 923-257? 

Project Title: Grant Application for One Port CIP project 

Grant Source: Federal Transit Administration Section 23 Interstate Transfer Funding 

Proposed (Continuation) Grant Project Summary: 
• Downtown Ferry Terminal Improvements 

Amount of Federal Grant Funding Applied for: SI .594,300 



Amount of Required State. Local and Regional Matching Funds: S2S1.3S2 

Maximum Funding Amount Available: $1.594,500 

Number of Positions Created and Funded: Not Applicable 

Amount to be Spent on Contractual Services: SI .594,500 

Will Contractual Services be put out to Bid? Yes , 

Term of Grant: Not Applicable 

Date Department Notified of Available funds: Not Applicable 

Application Due Date: Not Applicable 



Department Head Approval 



Mran/nrantc/Pp^/Q.rQ/nnC Pr>rm ri.T5.onn 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 7 - File 99-1811 



Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 3, 1999. 



Department: 



Port 



Item: 



Resolution approving a Ground Lease with Ferry 
Building Investors, LLC, for the rehabilitation of the 
Ferry Building, located on the Embarcadero and 
Market Street, as a mixed-use project and approving a 
negative declaration. 



Description: Charter Section 9.118 requires that the Board of 

Supervisors approve non-maritime leases of real 
property or contracts and agreements entered into by a 
City department extending for a period of ten years or 
more. The proposed resolution would approve a 66-year 
Ground Lease between the Port and Ferry Building 
Investors, a California Limited Liability Company 
(LLC), to renovate and restore the Ferry Building as an 
intermodal ferry terminal and mixed-use development. 

The Ferry Building is owned and maintained by the 
Port, which includes three floors of primarily office 
space consisting of a total of 291,872 square feet. 
Within the Ferry Building, the Port currently occupies 
41,934 square feet of office space, or approximately 14 
percent, and leases the remaining 249,938 square feet 
of space to approximately 93 other tenants, including 
three long-term commercial tenants. The three long- 
term commercial tenants include (1) the World Trade 
Club, a private business club, which occupies 29,521 
square feet of space, of which 25,863 square feet is 
under a long-term lease expiring in 2004 and 3,658 
square feet is on a month-to-month lease, (2) Limbach 
& Limbach, a law firm, which occupies 35,434 square 
feet, including 20,197 square feet in a long-term lease 
expiring in 2006 and 15,237 square feet in a month-to- 
month lease, and (3) Amtrak, which occupies 4,100 
square feet with a lease expiring in 2005. 

All of the Port's approximately 90 other tenants in the 
Ferry Building have month-to-month leases or leases 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



which expire by the Fall of 2000. According to Mr. Paul 
Osmundson of the Port, most of the Ferry Building 
tenants have month-to-month leases, including the 
three long-term tenants who have month-to-month 
leases for a portion of their space because the Port has 
been in the predevelopment stage for the proposed 
renovation of the Fem* Building for over five years. 
Therefore, the Port limited the number of tenants with 
long-term leases in order to maximize the flexibility for 
future development of the Ferry Building, Mr. 
Osmundson advises. 

The proposed development of the Ferry Building would 
consist of approximately 40,000 square feet of ground 
level commercial retail space, including fresh and 
prepared food markets and approximately 20,000 
square feet for four restaurants. The ground level, with 
a total of 105,000 square feet, will also contain Ferry 
passenger services, including ticketing booths, 
sheltered covered areas and a Central Concourse with 
major passageways connecting Market Street to the 
Bay, as well as loading and serving areas. 

The second and third floors will contain a total of 
approximately 164,000 square feet of space, including 
approximately 150,000 square feet of market rate office 
space of which approximately 2,500 square feet will be 
used for the Port Commission's hearing room and 500 
square feet will be used for ancillary Port office space. 
The remaining approximately 14,000 square feet of 
space(164,000 less 150,000) would be interior public 
space. Overall, the new Ferry Building would contain a 
total of 269,000 square feet of space, resulting in a 
reduction of approximately 23,000 square feet of space 
from the current approximately 292,000 square feet 
within the Fern- Building. Mr. Alec Bash of the Port 
reports that the reduction in space is a result of the 
restoration of the Ferry Building to contain the original 
Nave Bay, which is a long narrow central haH rising 
higher than the adjacent portions of the building, which 
will open up the center portion of the building from the 
ground floor to the roof, by removing about one-third of 
the second floor and all of the third floor. The proposed 
development will also seismically retrofit and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



rehabilitate the Ferry Building to current fire and 
safety Building Code standards. 

The Lease Disposition and Development Agreement, 
between the Port and the Developer, which is not 
subject to the Board of Supervisors approval, is 
intended to establish the conditions for the 
development of the Ferry Building by the Developer 
and to state the conditions for the delivery of the 
Ground Lease for the Ferry Building and the site to the 
Developer by the Port. The Lease Disposition and 
Development Agreement between the Port and the 
Developer, Ferry Building Investors, identifies the 
scope of the development project and includes a 
schedule of performance, indemnification requirements, 
relocation of tenant provisions, and other issues related 
to the construction phase of the project. The Lease 
Disposition and Development Agreement was approved 
by the Port Commission on August 24, 1999 and will 
become effective when the Port Director signs the 
Agreement, which Mr. Osmundson advises will not 
occur until the Board of Supervisors approves the 
proposed Ground Lease resolution. The Lease 
Disposition and Development Agreement will then 
expire upon the completion of the Ferry Building's 
construction, which is anticipated to be in 
approximately June of 2002. 

The proposed Ground Lease for the Ferry Building 
between the Port and the Ferry Building Investors, 
which is the subject of the proposed resolution, 
establishes the terms and uses for the Ferry Building 
and identifies the specific compensation and other 
requirements for each of the parties during the term of 
the Ground Lease. This Ground Lease would commence 
after specific conditions are met, which are identified in 
Attachment 1 to this report, provided by the Port. Mr. 
Osmundson advises that these conditions are expected 
to be achieved by January of 2001, and the Ground 
Lease would extend for 66 years, or until 
approximately 2067. According to Mr. Osmundson, the 
Ferry Building Investors proposed the Ground Lease 
term of 66 years, which is the maximum allowable 
under the State's Burton Act. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Under the proposed 66-year Ground Lease, the 
Developer, Ferry Building Investors, will be responsible 
for all of the costs required for managing, improving, 
operating, maintaining and repairing the Ferry 
Building and the surrounding area. During this period 
of time, the Port would continue to own the Ferry 
Building and at the conclusion of the 66-year Ground 
Lease, the responsibility for the management, 
operation and maintenance of the Ferry Building and 
all improvements will revert back to the Port. 

Fiscal Provisions: Attachment 2, provided by the Port, identifies the 
major fiscal provisions of the proposed Ground Lease. 
As shown in Attachment 2, the Port will initially 
receive a minimum guaranteed rent of SI. 4 million per 
year, payable on a monthly basis of $116,667 per 
month, from the Ferry Building Investors. In 
accordance with the proposed Ground Lease, if the base 
rent is not paid, (1) Ferry Building Investors would be 
in default of the lease and the Port would have the 
right to terminate the lease and (2) such rent payments 
would continue to accrue, with annual interest costs of 
either ten percent or five percent over the Federal 
Reserve Bank rate, whichever is greater. 

This $1.4 million minimum guaranteed annual rental 
income would be adjusted by the Consumer Price Index 
(CPI) every five years, subject to a minimum of two 
percent and a maximum of four percent per year, or a 
total of between ten to 20 percent every five years. This 
CPI rent adjustment would be paid by the Ferry 
Building Investors to the Port prior to any return on 
investment is paid to Fern- Building Investors, but, 
after the debt service, reserves and other operating 
expenses of the Ferry Building property are paid by 
Ferry Building Investors. If sufficient funds are not 
available to Ferry Building Investors to pay the Port 
this CPI rent adjustment, such payment may be 
deferred, interest-free, until such funds are available. 

In addition to the $1.4 million annual adjusted rent 
payments, as shown in Attachment 2, the Developer 
will pay the Port a Participation Rent equal to 50 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



percent of the net income received by the Developer, on 
a quarterly basis, beginning six months from the date 
that the Ferry Building's net cash flow is positive. This 
Participation Rent would be paid after deducting the 
annual adjusted CPI rent payments and after the 
Developer receives an 11 percent return on their 
equity. Therefore, the Port would only receive such 
Participation Rent, if Ferry Building Investors 
revenues exceed not onby their operating and 
maintenance costs, debt service and reserves, but also 
the adjusted $1.4 million annual CPI rent payments to 
the Port and an 11 percent return on equity to Ferry 
Building Investors. 

As outlined in Attachment 2, the proposed Ground 
Lease also contains specific provisions giving the Port 
an option to share in the net proceeds from the 
transfer, sale, assignment or refinancing of the Lease. 
If the Ferry Building Investors refinances the lease, the 
Port would be paid 30 percent of all net refinancing 
proceeds. Assuming that under such refinancing, Ferry 
Building Investors would be realizing funds and thus 
increasing the debt service cost, the refinancing would 
serve to reduce the amount of Participation Rent that 
would be available to be paid to the Port. Alternatively, 
if Ferry Building Investors refinances to realize lower 
debt service costs, the Port would potentially realize 
increased Participation Rent, as the debt service costs 
are reduced. If Ferry Building Investors transfers or 
sells the Ground Lease, the Port can elect to receive 30 
percent of the net proceeds from the transfer or sale, 
but, in return, the Port would relinquish the 50 percent 
Rent Participation provision, although the Port would 
continue to receive the CPI adjusted monthly rent 
payments. 

Given these financial provisions, Attachment 2 
identifies the Port's Likely projected revenues totaling 
$88.4 million over a 20-year period, assuming that the 
Ground Lease is refinanced after ten years and sold 
after 20 years. Although this analysis only reflects the 
initial 20-year period, during the remaining 46 years of 
the proposed 66-year Ground Lease, if the Ground 
Lease is sold, the Port would continue to receive the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Commit; 

December 15, 1999 Finance and Labor Committee Meeting 

CPI adjusted monthly rent payments, or an estimated 
$64.4 million from the base rent and up to an 
additional $166 million from the CPI adjustments, 
assuming an average inflation rate of 3.2 percent, for a 
total of $318.8 million ($88.4 million plus $64.4 million 
plus $166 million). Mr. Osmundson also notes that if 
the Ground Lease is not sold or transferred, although 
the Port would not receive the estimated $24.5 million 
in sales proceeds as shown in Attachment 2, the Port 
would continue to receive the CPI monthly rent 
payments totaling up to approximately $230.4 million 
($64.4 million plus $166 million) and the 50 percent 
Rent Participation revenues for the subsequent years, 
which are estimated by Ferry Building Developers to be 
between approximately $3.4 million to $22.4 million 
annually. 

Comments: 1. Presently, the Port occupies 41,934 useable square 

feet of administrative office space in the Ferry 
Building. In addition, the Port indicates that they 
currently occupy 4,610 square feet of storage space in 
the Ferry Building, that will be moved to an off-site 
storage facility. The Port intends to relocate their 
administrative offices to Pier 1, under a 50-year lease 
and sublease arrangement with AMB Property 
Corporation, which was approved by the Board of 
Supervisors in April of 1999 (Resolution No. 329-99). 
Pier 1 is located immediately adjacent to the Ferry 
Building. Under the Pier 1 sublease, the Port will 
occupy 45,630 useable square feet of space, an increase 
of 3,696 square feet. In addition, as noted above, the 
Port will lease 3,000 square feet of additional space in 
the Ferry Building, for the Port Commission hearing 
room and related office space, for a total of 48,630 
square feet of space for the Port, as compared with the 
current 41,924 square feet, an increase of 6,706 square 
feet, or 16 percent. It should also be noted that the Pier 
1 sublease allows for the Port to occupy up to an 
additional 30,000 square feet of space during the 50- 
year term of the sublease. 

2. Under the previously approved Pier 1 lease and 
sublease arrangements, AMB Property Corporation will 
construct and manage a proposed new office building. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



When completed, AMB will occupy a portion of the new- 
Pier 1 office space, sublease a portion of the new office 
space to the Port and sublease a portion of the new 
space to other outside tenants. Under such 
arrangements, , the Port will pay AMB Property an 
initial rent of $153,051 per month for 52,475 square 
feet of office space, or approximately $2.92 per square 
foot per month ($35 annually). The sublease has 
various escalation clauses, which become effective over 
the 50-year term of the lease and sublease. 

Under these arrangements, previously approved by the 
Board of Supervisors, AMB Property will receive a 
return of 11 percent on their estimated construction 
costs of $34,511,526, or $3,796,268. Under a revenue- 
sharing arrangement, beginning in j T ear six, and 
continuing for the remaining 45 years of the lease, 
AMB will pay the Port 50 pexxent of the increased total 
rental income received by AMB from all the tenants, 
including the Port and AMB. At the end of the 50-year 
term of the lease and sublease, the Pier 1 building and 
all improvements will belong to the Port. 

3. Pier 1 construction began in August of 1999 and is 
projected to be completed in December of 2000. As soon 
as it is completed, the Port anticipates relocating its 
administrative offices and staff to the newly renovated 
Pier 1 facility. The Ferry Building construction is then 
projected to begin immediately thereafter in January of 
2001, and to be completed by June of 2002. One of the 
conditions stated in the Ferry Building Lease 
Disposition and Development Agreement is that if the 
Port is unable to vacate the Ferry Building by January 
of 2001, due to a delay in the Pier 1 project, the Port 
has various options to extend that date, with graduated 
penalties in the form of per diem rent credits to be paid 
to Ferry Building Investors the further the date is 
extended. Conversely, the Ferry Building Investors 
must meet their specific conditions by that date, or pay 
the Port $75,000 per month for their delays. 

4. Mr. Osmundson notes that when the renovations at 
the Ferry Building are completed, office and retail 
space in the Ferry Building will rent at the then 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



current market rates, which is estimated to be gross 
rent of $53.89 per square foot per year for office space, 
and gross rent of $40.93 per square foot per year for 
retail space. Mr. Bash advises that the Port currently 
receives $16.68 per square foot per year from the World 
Trade Club and $32.64 per square foot per year from 
Limbaugh & Limbaugh, from their long-term leases at 
the Ferry Building. Assuming operating costs of $8 per 
square foot, the proposed Ferry Building office space 
rate of approximately $54 per square foot is $11 more 
per square foot, than the proposed net rent of $35 per 
square foot, that the Port will pay for office space in 
Pier 1. 

5. Mr. Osmundson advises that the Port will not be 
required to pay Ferry Building Investors for tenant 
improvements or the use of the 3,000 square feet of 
additional space in the Ferry Building, to be used for 
the Port Commission meetings and for an ancillary 
office. Currently, the Port occupies all of its Fern- 
Building space rent-free. However, Mr. Osmundson 
notes that Ferry Building Investors will be able to rent 
out the Port Commission meeting room and the 
ancillary office space when the Port is not using such 
space, in accordance with a proposed sublease. Mr. 
Osmundson reports that the sublease between Fern- 
Building Investors and the Port for use of this 3,000 
square feet of space in the Ferry Building will be 
subject to the Board of Supervisors approval and is 
anticipated to be brought to the Board within the next 
three months. 

6. On May 15, 1998, the Port issued a Request for 
Qualifications (RFQ) to Rehabilitate and Lease the 
Ferry Building as a mixed-use project. Mr. Osmundson 
advises that this RFQ was advertised in the Wall 
Street Journal, Los Angeles Times, New York Times, 
Urban Land Magazine and numerous other 
publications, and that the RFQ was sent to over 100 
firms. In response, the Port received four qualification 
statements and subsequently, the Port invited the four 
respondents to submit proposals for development of the 
Ferry Building. The four respondents were: (1) Madison 
Marquette Realty Senices, (2) TrizecHahn 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Development Corporation, (3) Mentmore Development 
Company/Mills Corporation and (4) William Wilson & 
Associates. An analysis of the four proposals was 
conducted by the Port's staff and assisted by outside 
real estate consultants, Keyser Marston Associates and 
the accounting firm of KPMG Peat Marwick. On 
November 17, 1998, the Port staff recommended and 
the Port Commission selected William Wilson & 
Associates, located in San Mateo, as the developer to 
enter into an Exclusive Right to Negotiate Agreement 
for the Ferry Building (Resolution No. 98-114). 

William Wilson and Associates subsequently merged 
with Cornerstone Properties, a national real estate 
investment trust, and is now known as Wilson 
Cornerstone. Wilson Cornerstone created a 
development entity known as Ferry Building Investors, 
LLC, to act as the developer for the Ferry Building 
project. The Port advises that Wilson Cornerstone, the 
parent company of Ferry Building Investors, is also 
currently constructing the Gap Headquarters building, 
at The Embarcadero and Folsom Street and was the 
developer for the restoration of the Flood Building, both 
landmark buildings in San Francisco. The Board of 
Directors and the Officers of Wilson Cornerstone, Inc. 
are identified in Attachment 3 provided by the Port. 

7. As shown in Attachment 4 provided by the Port, 
Ferry Building Investors estimate project construction 
costs of approximately $70 million, which includes 
$2,683,333 of Ground Lease minimum rental payments 
to the Port during the construction period. According to 
Mr. Osmundson, the construction management firm of 
O'Brien Krietzberg has reviewed these estimates for 
the Port and determined them to be reasonable. 
However, Ms. Diane Millner of the City Attorney's 
Office reports that if the actual costs exceed the 
developer's estimates, then Ferry Building Investors 
would be liable for any cost overruns, and not the Port. 
However, Ms. Millner notes that any additional costs 
that are incurred by Ferry Building Investors will 
ultimately affect the Port's revenues, since the 
proposed project has shared public/private 
Participation Rent provisions. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



8. The Ferry Building is a City landmark listed on the 
National Register of Historic Places. After construction 
is completed, the Developer expects to re' 
certification from the National Park Service that the 
construction complies with the Secretary of Interior's 
Standards for Rehabilitation, making the project 
eligible for a 20 percent Federal Historic Preservation 
Tax Credit. Mr. Osmundson advises that these Tax 
Credits, which are similar to the Federal Affordable 
Housing Tax Credits, will enable the Fern.' Building 
Investors to increase the amount of cash available for 
the project, which will potentially increase the amount 
of net cash that will be available to split with the Port 
under the Rent Participation provisions. 

9. Currently, the Ferry Building has 41 parking spaces. 
Under the proposed Ferry Building development, there 
would be no on-site parking. The Budget Analyst notes 
that the Planning Department in a letter of February 
16, 1999 granted an exemption to the adjacent Pier 1 
project from all Planning Code off-street parking 
requirements, which was previously approved by the 
Board of Supervisors. The current Planning Code 
requirement is for one off-street parking space per 500 
square feet of office and retail space development and 
slightly higher off-street parking requirements for 
restaurant space. Based on the projected use of the 
269,000 square feet of the Ferry Building project, 514 
off-street parking spaces would be required. However, 
according to Mr. Bash, this parking requirement may 
be reduced based on the Ferry Building's already 
existing deficit of parking. Mr. Bash advises that the 
developers for the Ferry Building project will be 
seeking an exemption from the Planning Department 
for such off-street parking requirements. 

In addition, Mr. Osmundson advises that the Port 
intends to request a reduction in the Planning Code 
parking requirements for the proposed Ferry Building 
project. Furthermore, Mr. Osmundson reports that the 
Port would like to pursue the construction of an 
underground parking garage on a City-owned 
(Department of Pub he Works) parcel at The 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Embarcadero and Washington Street, which is directly 
across the street from the Ferry Building, which would 
be beneficial to the Ferry Building and the adjacent 
waterfront area. However, Mr. Osmundson reports that 
the Port cannot proceed with such construction until 
the completion of an environmental review for a 
Butterfly Discovery Museum on this same site, which is 
anticipated to be completed within the next several 
months. Mr. Osmundson advises that a decision by the 
Board of Supervisors will determine the final use of 
this site. 

10. Under the proposed agreements, Ferry Building 
Investors will be required to carry various types of 
insurance (e.g., property insurance, commercial 
liability insurance, business insurance, etc.) and the 
agreements contain various indemnification provisions. 
Mr. Keith Grand, the City's Risk Manager previously 
reported that he had reviewed the insurance and 
indemnity provisions and recommended the following 
amendments be incorporated in the Ground Lease, to 
further protect the City: (1) In Section 18.1(b), General 
Insurance Requirements, the Lease currently states 
that all insurance shall be carried under a valid and 
enforceable policy issued by insurers of recognized 
responsibility that are rated Best A-:VI or better. Mr. 
Grand recommends that the rating be changed from A- 
VI to A- VIII, which is a higher rating and is the City's 
usual minimum requirement for insurance carriers; (2) 
In Section 18.2, Port Entitled to Participate, the Lease 
currently states that the Port shall not be entitled to 
participate in and consent to any settlement, 
compromise or agreement with respect to any claim for 
any loss in excess of $5 million covered by the 
insurance required to be carried, if the tenant has 
agreed in writing to commence and complete 
restoration. Mr. Grand advises that the Port should be 
able to participate in such insurance settlements, that 
would otherwise go solely to Ferry Building Investors. 

As shown in Attachment 5, Mr. Grand now advises that 
the proposed Ground Lease has been amended to reflect 
the higher insurance rating for the carrier, as 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



previously recommended, and that the property claim 
settlement issues have been resolved. 

11. The proposed resolution would also adopt the 
findings with respect to the Final Negative Declaration 
for the Ferry Building Project, which was issued by the 
Planning Department on October 1, 1998. On August 
24, 1999, the Port Commission adopted the Final 
Negative Declaration and mitigation monitoring 
program for the Fern- Building Project. 

12. In accordance with the proposed conditions for 
entering into the Ground Lease, as shown in 
Attachment 1, the Port must deliver the Ferry Building 
to Ferry Building Investors free of all tenants and 
occupants, except the World Trade Club (WTC), 
Limbach & Limbach and Amtrak, the three tenants 
with long-term leases in the Fern- Building. 
Furthermore, as stated in the Lease Disposition and 
Development Agreement, Ferry Building Investors is 
responsible, at no cost to the Port, for the relocation or 
buyout of these three long-term tenants, prior to 
beginning renovations of the Fern - Building. Mr. 
Osmundson advises that the World Trade Club is 
currently objecting to (1) potential termination of its 
short-term (month-to-month) lease provisions, (2) 
potential termination of its short-term parking lease on 
adjacent Port property and (3) the developer not 
negotiating in what the World Trade Club considers to 
be good faith. However, Mr. Osmundson advises that 
the Port believes that Fern Building Investors is 
handling the World Trade Club appropriately. 

13. In addition to the $88.4 million that the Port is 
estimating it will receive over the first 20 years of the 
proposed Ground Lease, Mr. Osmundson reports that 
the City will receive approximately $700,000 annually 
from Possessory Interest Taxes from Fern' Building 
Investors and approximately $300,000 annually from 
Sales Taxes generated by the proposed retail 
establishments, or a total of $1.0 million annually. 
Currently, Mr. Osmundson reports that the City 
receives approximately $250,000 annually from 
Possessory Interest Taxes paid by the various leasees 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 






in the Ferry Building and approximately $10,000 
annually from Sales Taxes generated by the few retail 
establishments, or a total of $260,000. Possessory 
Interest Taxes are a means for the City to collect 
Property Taxes on public property that is used for 
private purposes. Overall, Mr. Osmundson estimates 
that the proposed Ferry Building project will generate 
an additional $740,000 of annual revenue for the City's 
General Fund. 

14. As discussed above, the Port currently owns, 
operates and maintains the Ferry Building, including 
providing security, janitorial, garbage, utilities, 
insurance, maintenance, property management and 
administrative support functions. As shown in 
Attachment 6 provided by the Port, in FY 1998-99, the 
Port spent a total of $1,350,000 on such services for the 
Ferry Building. During FY 1998-99, the Port generated 
a total of $2,553,144 in gross revenues from the Ferry 
Building, thus realizing ($2,553,144 gross revenues less 
$1,350,000 of costs) $1,203,144 of net revenues for the 
Port. 

It should be noted that by comparison, Ferry Building 
Investors projects that in 2003, the first year of 
occupancy for the new Ferry Building, total gross 
income will be approximately $12 million and operating 
expenses, including taxes (which the Port did not incur) 
will be approximately $3.2 million, resulting in a net 
operating income of approximately $8.8 million. After 
payment of the Port's base $1.4 million annual rent and 
estimated debt service payment of $3.6 million, Ferry 
Building Investors projects realizing a net cash flow of 
approximately $3.8 million, this first year of operation. 

15. Under the proposed Ground Lease provisions, the 
Ferry Building Investors will assume responsibility for 
the construction, operation and maintenance of the 
Ferry Building beginning in January of 2001. 
Therefore, all of the $1,350,000 of costs that the Port is 
currently incurring to support the Ferry Building's 
operations and maintenance should cease. In addition, 
Mr. Osmundson advises that Ferry Building Investors 
will be responsible for maintaining the exterior area, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



up to 20 feet, surrounding the Fern- Building, which 
the Port currently maintains. Mr. Osmundson could not 
provide the Budget Analyst with an estimate of the 
additional costs that the Port currently incurs to 
maintain this exterior area, which will also no longer 
be necessary once Ferry Building Investors assumes 
control of the interior and exterior Ferry Building 
operations and maintenance. 

Mr. Osmundson had previously advised that the Port 
should be able to reduce its contracts for security and 
janitorial services and for the direct garbage, utility 
and insurance costs, for an estimated total annual cost 
of $1,087,000. However, Mr. Osmundson had reported 
that the Port did not plan to cut back the reserve funds 
or the maintenance, property management and 
administrative staff that are currently assigned to the 
Ferry Building, at an estimated annual cost of 
approximately $263,000. Instead, Mr. Osmundson 
reported that the Port intended to reallocate such funds 
and staff to other Port properties, as needed. The 
Budget Analyst recommended that the FY 2000-2001 
budget for the Port be reduced by $675,000, or the six 
month portion of the estimated SI, 350, 000 annual 
costs, which would no longer have to be incurred by the 
Port, assuming a January of 2001 transfer of the 
property from the Port to Ferry Building Investors. 
Furthermore, the Budget Analyst recommended that 
an additional $675,000 be reduced from the FY 2001- 
2002 Port budget, to reflect the additional six months of 
savings during the following year and that the Port 
provide a plan in writing to the Board of Supervisors on 
specifically how the Port will reduce their budget. 

In response, the Port provided Attachment 6, which 
indicates Pier One estimated annual expenses of 
$1,083,000 and Mr. Osmundson reports that the Port's 
FY 2000-01 budget will include approximately 
$550,000 for the Port's offices at Pier One, assuming 
the Port will occupy Pier One offices beginning in 
December of 2000, or approximately six months of the 
fiscal year. However, the Budget Analyst notes that, as 
shown in Attachment 6, the Port is now estimating 
annual rent expenses of $644,000. According to Mr. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Osmundson, this is the current estimated net amount 
that the Port will need to pay the rent costs for Pier 
One office space, including the tenant improvement 
expenses, less the pa} - ments that AMB Property 
Corporation, the developer for Pier One, will pay to the 
Port. 

The Budget Analyst notes that this $644,000, now 
being reported by the Port, is $523,251 or 433 percent 
more than the estimated net rent costs of $120,749 per 
year (rental costs of $1,836,608 plus $67,000 for tenant 
improvements less payment of $1,782,859 from AMB to 
the Port) that the Port previously reported to the Board 
of Supervisors in April of 1999 was the likely estimated 
net expenses for Pier One, when the Port was seeking 
approval of the Pier One project (File 99-0527). Mr. 
Kirk Bennett of the Port reports that the higher rent 
costs now being reported for Pier One reflect one of the 
worst case scenarios, in which the developer, AMB, is 
required to use the entire 15 percent construction 
contingency funds in order to complete the project, 
which was included as an alternate scenario in the 
Budget Analyst report. However, Mr. Bennett advises 
that the Pier One project is currently under 
construction, and it is his understanding that the 
project is currently on time and budget. 

In addition, at the time that the Port requested 
approval of the Pier One project from the Board of 
Supervisors, only eight months ago, the Port reported 
to the Budget Analyst that AMB would provide the 
utilities and the Port would provide the maintenance 
services for the office space in Pier One. However, at 
that time, no amount was provided by the Port to the 
Budget Analyst or to the Board of Supervisors 
regarding Operating and Maintenance Expense Charge 
Backs for specific utility expenses. Therefore, the 
Budget Analyst is now questioning the Port including 
an additional $266,000 for such estimated Operating 
and Maintenance Expense Charge Backs. The Budget 
Analyst therefore recommends that an amount of 
$120,749 be budgeted for the anticipated net rent costs 
for Pier One, as previously reported by the Port, and 
that before any additional expenses are budgeted for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



Operating and Maintenance Expense Charge Backs, a 
detailed breakdown of such expenses should be 
provided to the Budget Analyst. 

In addition to these budget discrepancies pertaining to 
the numbers provided to the Budget Analyst for the 
Budget Analyst's report to the Finance and Labor 
Committee Meeting on April 14, 1999 versus the new 
numbers now being reported by the Port, the Port also 
advises that the difference of $267,000 between the 
expenses of the current Ferry Building ($1,350,000) 
and the new Pier One building ($1,083,000) is due to 
existing Port maintenance (electrician, plumbers and 
carpenters), property management and administrative 
staff which are currently assigned to the Ferry 
Building, which the Port is advising would be 
reallocated to other Port properties, once construction 
begins on the Ferry Building project. Specifically. Mr. 
Osmundson advises that property management and 
administrative staff that had been working on the 
Ferry Building will spend time on Pier One and the 
Agriculture Building and on supporting new leasing 
and development activity at the Port and that 
maintenance staff will be reallocated to various other 
office and warehouse facilities that are in need of repair 
and maintenance. The Budget Analyst seriously 
questions the need for such increased levels of property 
management, administrative and maintenance staffing 
for the Port, when the existing staffs current 
responsibilities are terminated at the Ferry Building. 
Therefore, the Budget Analyst continues to recommend 
that such positions be eliminated. 

The Budget Analyst notes that the Port, as shown in 
Attachment 6, has also included an estimated $80,000 
for janitorial expenses, S21,000 for interior 
maintenance & supplies to support the Port's janitorial 
services, $65,000 for electricity and $7,000 for 
insurance. Although the Budget Analyst has not been 
provided with supporting documentation for these 
expenses, they appear reasonable. 

Therefore, the Budget Analyst recommends that the 
Port reduce its annualized expenditures by $1,056,000 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



($1,350,000 for the Ferry Building's current annual 
expenditures less (a) approximately $121,000 for net 
rent costs for Pier One, (b) $80,000 for janitorial, (c) 
$65,000 for electricity, (d) $7,000 for insurance and (e) 
$21,000 for interior maintenance & supplies) and that a 
more detailed breakdown of all operating expenses be 
provided to the Budget Analyst during the budget 
process. 

16. On September 10, 1999, Mr. Douglas Wong, the 
Executive Director of the Port issued a memorandum to 
the Members of the Finance and Labor Committee 
responding to the request for information on the 
development options available to the Port in restoring 
and rehabilitating properties, such as the Ferry 
Building. This memorandum discussed the Port's 
development options of having the (1) Port as 
Developer, (2) Port as Ground Lessor, and (3) Port as 
Ground Lessor under a Private-Public Partnership. The 
conclusion drawn in this memorandum is that "the Port 
will improve its chances of creating a successful project 
(thereby maximizing its revenue) by bringing in the 
capital resources and skills of Wilson Cornerstone as 
the developer," with the Port as Ground Lessor under a 
Private-Pub He Partnership. 

The Budget Analyst notes that in both the Best and 
Conservative Case Projections included in this 
memorandum, the Port assumes that Ferry Building 
Investors will sell the Ground Lease in year 20, thus 
realizing an additional $22.7 million to $39.7 million of 
revenue for the Port, under these two private developer 
scenarios. Similarly, as reflected in Attachment 2, the 
Port assumes not only a sale of the Ground Lease in 
year 20, netting the Port an estimated $24.5 million, 
but an additional $14.3 million from the Port's share of 
the refinancing proceeds in year 10 of the Ground 
Lease. Together, these two provisions would yield the 
Port $38.8, or approximately 44 percent of the total 
estimated $88.4 million projected over the 20-year 
period. Yet, while these scenarios assume the developer 
will sell the leasehold interest in year 20, Mr. 
Osmundson states that the Port cannot assure or even 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

predict when or if the developer would ever refinance, 
transfer or sell the proposed Ground Lease. 

However, Mr. Osmundson now advises that the 
developer intends to sell the leasehold at some point 
within the first 20 years of operation and that the 
Port's economic consultants, Keyser Marston 
Associates, also advise that it is reasonable to assume a 
sale of the leasehold sometime within the first 20 years 
of the Lease. Nevertheless, the Port prepared an 
estimate of the total payments to the Port over the first 
20 years, without a sale by the developer, which results 
in total lease payments to the Port of approximately 
$71.8 million over the first 20 years of the Lease. 

17. If the Ferry Building Investors want to sell, 
transfer, assign or refinance the Ferry Building Ground 
Lease, such sale, transfer, assignment or refinancing 
would not be subject to the Board of Supervisors 
approval, according to Mr. Osmundson, unless there 
were to be amendments to the Ground Lease. Mr. 
Osmundson also advises that the Port cannot 
reasonably withhold the Port's consent of such a sale, 
transfer, assignment or refinance. However, given the 
66-year long-term length of the proposed Ground Lease, 
and the likelihood that the lease may be sold at 
sometime in the future, the Budget Analyst previously 
recommended that such future sale, transfer or 
assignment of the proposed Ground Lease from the 
Ferry Building Investors be subject to review and 
approval by the Board of Supervisors. 

In response, as shown in Attachment 7, which is a 
letter from the Port to the Budget Analyst dated 
December 7, 1999, Mr. Osmundson advises that the 
Port Commission is not agreeable to this provision "due 
primarily to the financing difficulties and negative 
impacts on the future sale value of the leasehold,". . . 
"The Port Commission also believes that such a 
transaction is within their sole responsibility," and that 
the Board of Supervisors should not be involved in such 
a decision. The Port has also submitted a letter dated 
November 11, 1999 from Trowbridge, Kieselhorst & 
Company, Inc., a commercial mortgage banking firm 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 



based in San Francisco, which is included as 
Attachment 8, which states that "It is our opinion that 
a modification of the ground lease to incorporate a 
requirement that any sale, transfer or refinance be 
subject to the additional approval of the Board of 
Supervisors will decrease the value of the ground lease 
and significantly worsen the terms upon which the 
ground lease can be commercially financed. A second 
governmental approval, b3 r the Board of Supervisors, 
will in all likelihood greatly increase the time required 
to achieve certainty of transaction and by increasing 
the uncertainty of the transaction, limit the universe of 
lenders and buyers, and decrease the value they will 
place on the building. The uncertainty and its related 
impact on value will be even more severe in periods of 
tighter credit than prevails today. To preserve the 
value of your asset we strongly recommend that you not 
adopt the amendment to the Ground Lease proposed by 
the Budget Analyst." Given this response, the Budget 
Analyst therefore considers this provision to be a policy 
matter for the Board of Supervisors. 

18. The Budget Analyst raises the following concerns 
about the proposed Ground Lease for the Ferry 
Building: (1) the Port would occupy 3,000 square feet of 
additional space in the Ferry Building, in addition to 
the already increased Port administrative space of 
45,630 square feet, and additional expansion potential 
of 30,000 square feet in the adjacent Pier 1 facility; (2) 
there is not proposed to be any parking available on- 
site at the Ferry Building, although the Planning Code 
requirement is for 514 off-street parking spaces and a 
potential off-site parking garage across the street is 
currently being proposed for a Butterfly Discovery 
Museum; (3) the World Trade Club, an existing long- 
term tenant, has raised various objections; (4) the 
Port's intention to continue to maintain the same level 
of Port operating expenses and maintenance, property 
management and administrative staff totaling 
$1,350,000 annually, after the Ferry Building is 
transferred to Ferry Building Investors for their 
operation and maintenance; and (5) any future 
transfer, sale or assignment of the proposed 66-year 
Ground Lease would not be subject to the Board of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Supervisors approval, unless amendments were remade 
to the Ground Lease. Given such concerns, the Budget 
Analyst considers approval of the proposed resolution 
to be a policy matter for the Board of Supervisors. 

19. Ms. Millner advises that the Board of Supervisors 
cannot amend the proposed Ground Lease, which is the 
subject of this proposed resolution. According to Ms. 
Millner, the Board of Supervisors can only approve, 
disapprove or continue the proposed resolution. 

Recommendations: Request that the Port reduce their annualized 
expenditures by $1,056,000, and provide a more 
detailed breakdown of all operating expenses as 
discussed in Comment No. 15 above. 

The Budget Analyst considers approval of the proposed 
resolution to be a policy matter for the Board of 
Supervisors, due to the numerous issues raised in 
Comment No. 18 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment 1 



Following are the conditions that must be satisfied for the escrow to close, whereby the Lease and 
the site will be delivered to Developer. 

• Port has approved the construction design documents. 

• Port has issued a full building permit or a site permit 

• Developer has submitted to the National Park Service Part 2 of the Historic Preservation 
Certification Application. 

• Developer has received all required approvals from regulatory agencies, including BCDC. 

• Developer has submitted to the Port an updated Construction Budget, and evidence of a 
guaranteed maximum price contract for the construction of improvements consistent with the 
Construction Budget. 

• Developer has provided the Guaranty. 

• Pier 1 is completed. 

• Developer has submitted evidence regarding the establishment of an investment entity to 

utilize Historic Tax Credits. 

/ 

• Developer has submitted a certificate of insurance for required insurance coverage and the 
title company is prepared to insure title. 

• Executed copies of the Lease have been submitted into escrow. 

• The Ferry Building is free of all tenants and occupants, except WTC, Limbach and Amtrak. 

• Developer has submitted a First Source Hiring Agreement and an HRC Certificate of 
Compliance and the Port has approved them. 

• Port has completed certain offsite work in the Apron Area and issued permits to enter to 
Developer for staging and other construction activity. 

• There have been no adverse changes in the condition of the site. 



e.i.tachmeri1 



IV. FTNANOAL ANALYSIS 

As previously discussed, under the Lease the Port stands to receive revenue from the project as 
follows: 

Minimum Rent: Guaranteed SI. 4 million annually 

Annual Consumer Price Index ("CPI'*) Adjustment: Between 10% and 20% every five years, 
after operating expenses, reserves and debt service. Unpaid CPI adjustments accumulate. 

Participation Rent: 50% of net cash flow, after 1 1% developer return on equity. Unpaid return 
on developer equity accumulates. 

Participation in Refinance Proceeds: Port receives 30% of net proceeds from refinancing. 

Participation in Transfer or Sale Proceeds: / Port can elect to receive 30% of net proceeds from a 
transfer or sale, but thereafter relinquishes its 50% participation in net cash flow. 

The scenario presented below is for a 20 year period, assuming 3% inflation, a refinance after 10 
years, and a sale after 20 years. 

Port Revenue Cumulative Port Revenue. Developer Projected Rents 

Minimum Rent S28.0 million 

CPI Adjustment Rent S5.6 million 

Participation Rent SI 6.0 million 

Refinancing Proceeds SI 4.3 million ■ 

Sale Proceeds S24.3 million 

TOTAL S88.4 million 



OCT 21 '99 01 :35PM PORT OP SP EXECUTIVE 



CORNERSTONE PROPERTIES INC 
BOARD .OF DIRECTORS 



Attachment 3 



OFFICERS 



WILLIAM WILSON III 

Chairman of Cornerstone Properties Inc. 

JOHN S. MOODY 

President and Chief Executive Officer of Cornerstone Praptnies In:. 

Dies VAN BEN sos 

Real Estate Consultant to Pensiocnfor.ds PGGM 

CECIL D. CONLEE 

Managing Director ofRodamco and Cnairman of CGR Advisors 

RODNEY C DlkiOCK 

Executive Vict President of Cornerstone Properties Inc. 

lLt.SH EAGLE 

Chairman of the Center for Real Estate at the 

Massachusetts Institute of Technology 

DONALD G. flSHER ' 

Chairman and Founder of Gap Inc. 

RANDALL A. HACK 

Founding Member of Nassau Capital LLC 

DR. XAXL-LUDWIG HERMANS 

Financial Consultant 

kaVS c. mautksk 

Vice Chairman of Simon Property Group 

DR. L'JTZ MELLINGER 

Managing Director of Deutsche Bank AC 

CRAlC R. STaPLETON 

President of Marsh G, McLennan Real Er-ate Advisors 

MICHAEL T. C- TOPHAM 

Executive Vice Prtsidcnt and Managing Director ofHincs 

JAN VAN DERVUJT 

Director of Real Estate Investments for Pensioenfond; PGGM 



WILLIAM WILSON III 

Chairmen sftht Board of Directors 

rOKN S. MOODY 

President and 

Chief ExtcuZve Officer 

H. Hi VAN BOVEN 

Chief Operating Officer and 
General Counsel 

rodney c diuock, 
Ei'rvavt Vict President 

John j. Hamilton ill 

Cnief Development Officer 

KEVIN P. XAHOKIY 

Senior Hee President and 
Cr.ief Financial Officer 

R. MATTKiW MORAN 

Chief Investment Officer 

JAMES W. ARCS 

Senior Vict President 
Asset Management 

SCOTT K. DALXYMPLZ 

Senior Viet President 
Asset Management 

THOMAS P. LOFTJS 

Chief Administrative Officer 
and Secretary 

THOMAS A. NYE 

Vict President and Treasurer 

A. SOREST PARAITE 

Senior Vice President, Leasing 

STEPHEN I. PILCH 
Senior Via President 
Asset Management 

THOMAS P. SULLIVAN 

Senior Vie* President 
Development 

JANET L. ASTON 

Vice President, Information Services 

ANDREW C BROWN 

Via Presiierj, Leasing 



JON W. CLA2.R 

Vice President, Internal Audit 

ZDWARD J. DONNELLY, JR. 

Vice Preiser.:, Property Services 

STEVEN S. ELLIOT 

Vies President 
Investment Management 

C1EGORY g. rocs 
Viet President, Leasing 

CH AXLES R. HAWLEY 

Vice President 

Southern California Region 

3RUCE A. JAMES 

Vice President, Engineering 

RICHARD A. LITTLE 

Vice President 
Property Management 

KHEAY Y. LOKE 

Vice President, Development 

MUM G. MAAS 

Vice President 

Larry m. mzlo 

Vice President, Boston Region 

JOKK C MOE 

Vice President, Leasing 

TERENCE J. REAGAN 

Vice President, Development 
FRANCIS K. SHIELDS. JR. 

Vice President, Acquisitions 

RICHARD SrRINGWATiR 

Vice Prejiiicnt, Development 

ROBERT T. SORRENTINO 

Vict President, Asset Management 

SCOTT A. STEPHENS 

Vice President, Peninsula Region 

CASSANDRA |. TORRJLDSON 

Vice President, Human Resources 

MARTIN |. WARD 

Vice President, East Bay Region 



FERRY BUILDING LEASE DISPOSITION AND DEVELOPMENT AGREEMENT 
Form of Budget 



Attachment 4 



Construction Budget: 






Acquisition of Ground Lease 




S927.0O0 


Lease Modification Costs 




5,109,929 


Environmental Mitigations 




3.750,000 


Entitlements 




281,000 


Architects &. Engineers 




4,334,212 


Shell Construction 




37,832,500 


Retail Tenant Work 




968,415 


Office Tenant Work 




5,982,500 


Retail Leasing Commissions 




849,410 


Office Leasing Commission 




1,037,219 


Marketing Expenses 




178.000 


Legal 




222,000 


Financing Fees 




756,000 


Development Fee 




2,610,127 


Contingency 




2,037,500 


Development Period Interest 




2,638,551 


Operating Shortfall: 






Development Period Ground 






Rent 


S2.6S3.333 




Development Period Operating Expenses 


1,924,150 




Less: Development Period 






Income 


i-i.221.S66) 




Total Construction Budget 




385,617 




S69.S99.9S0 




DEC 09'39 11:00 FR CCSF RISK hGT 415 554 S1E8 TO 925204S1 P. 01/01 

Attachment 5 

CITY AND COUNTY OF RISK management 
SAN FRANCISCO PROGRAM 



WILLIE L. BROWN, JR. 
Mayor 

Via Fax (252-0461) 

December 9, 1999 

TO: Debra Newman, Budget Analyst 

FROM: Keith Grand, Risk Manager [L^ ^ 

SUBJ: Port Ferry Building Lease 

The issue I raised about the Port not having the right to participate in a property insurance claim 
settlement in excess of $5 million has been resolved, as explained below, and I no longer have any 
objection on that point. The other issue of the acceptable rating for the tenant's insurer (p. 72) has been 
resolved by the tenant agreeing to the original Port requirement that such rating be not less than the 
A.M. Best raring of A-.VBL 

On the claim settlement issue, while the language could be clearer, Section 18.2 initially seems to 
provide that the Port is not entitled to participate in a property damage claim settlement in excess of S5 
million, if the tenant has agreed in writing to restore. However, an exception in this section refers to 
Section 12.3, which entitles the Port to participate in any settlement in excess of S3 million. Thus, the 
net effect of Sections 18.2 and 12.3, read together, is that the Port can participate in claims settlements: 

• in excess of S3 million, when the tenant has agreed to restore, and 

• in excess of S5 million, when the lease will be terminated, with no restoration. 

If questions, please call me at 554-6170. 

cc: Paul Osmundson, Port (274-0630) 
Neil Sekhri, Port (274-0494) 



City Hall, Room 362 

1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102 

Telephone (4151 554-6172; Fax (415) 554-6168 

** TOTQI PQRC npll ** 



Attachment 6 



Port Operating Expenses at the 
Ferry Building and Pier One 









Estimated Annual 










Amount (S003's) 




Description 


Fern - Bldg. 

S 128 


Pier One 


Security 1 ' 


S 




Janitorial 






370 




80 


Scavenger* 






39 






Electricity 






340 




65 


Gas* 






71 






Water/Sewer* 






38 






Insurance 






100 




7 


Maintenance & Reserves* 






176 






Interior Maintenance & Supplies 








21 


Administrative 






87 






Rent 










644 


Operating and Maintenance 


Exp. 


Charge Back* 







266 



Total 1.350 1,083 

* At Pier One all security, scavenger, gas, water sewer, and exterior building maintenance will be paid for by the 
developer AMB Properties. AMB will, in turn, charge the Port for its pro-rata share of these expenses. The 
current estimate of this charge is shown on the Operating and Maintenance Exp. Charge Back line. 



PORT OF SAN FRANCISCO 



Attachment 7 
Page 1 of 2 



AilA 

intr 



Ferry Building 
t-~> t -i mnn / San Francisco. CA 94111 

December 7, 1999 Telephone 415 274 0400 

Telex 275940 PSF UR 
Fax 415 274 0528 
Cable SFPORTCOUM 
Writer 

Ms. Debra Newman 
Budget Analyst 
1390 Market Street, Suite 1025 
San Francisco, C A 94102 

Subject: Item 5 - File 99-181 1 : Resolution Approving a Ground Lease with Ferry 
Building Investors, LLC, for the Rehabilitation of the Ferry Building, located on the 
Embarcadero and Market Street, as a Mixed-Use Project and Approving a Negative 
Declaration. 

Dear Debra: 

The purpose of my letter is to provide you with additional information and clarification 
regarding the Ferry Building Ground Lease, which will be heard at the December 15, 
1999 meeting of the Finance and Labor Committee of the Board of Supervisors. 

Insurance 

I have a attached a memorandum from Neil Sekhri, one of our Port Deputy City 
Attorneys, clarifying for Keith Grand the Port's position that the Lease as currently 
drafted protects the Port's financial interests in the event of insurance claims. Keith 
indicated that he would consider this information and either discuss it with you or write 
you a short memorandum. 

Sale, Transfer or Assignment of the Lease 

We have discussed this issue with the Port Commission, and they are not agreeable to it, 
due primarily to the financing difficulties and negative impacts on the future sale value of 
the leasehold, which were addressed in a letter from a commercial mortgage banking firm 
who has reviewed the lease (see attached letter). The Port Commission also believes that 
such a transaction is within their sole responsibility. 

Operating Budget 

The final attachment is a chart showing the projected operating expenses for the Port's 
administrative offices at Pier 1 which we will occupy beginning in December, 2000. Our 
FY 2000/2001 budget will reflect expenses of approximately $550,000 for the Port's 
offices at Pier 1. As I described in my November 16, 1999 letter to you, the other 
administrative and maintenance staff time and resources that had been allocated to the 
Ferry Building will be reallocated to other Port properties. 



Attachment 7 
Page 2 of T~ 



Ms. Debra Newman 
December 7, 1999 
Page Two 



I hope that this answers your questions. We look forward to seeing your final report. 
Sincerely, 



jUJLA 

Paul Osmundson 
Deputy Director 



Attachments 

cc: Honorable Members, Finance and Labor Committee 



Attachment 8 
Pase 1 of 2 



TROWBRIDGE, KIESELHORST & COMPANY, INC. / REAL ESTATE FINANCE 



VIA U.S. MAIL 



Mr. Paul Osmundson 
Director of Planning 
Port of San Francisco 
The Ferry Building 
San Francisco, CA 94111 



November 11, 1999 



Re: The Ferry Building 

San Francisco, California 



Dear Mr. Osmundson: 



Trowbridge, Kieselhorst & Company is a commercial mortgage banking firm based 
in San Francisco. We are the regional correspondents for to a number of institu- 
tional lenders including Allstate Insurance Company, American General Insurance 
Company, CIGNA, ING, J. P. Morgan Investment Management and Teachers Insur- 
ance and Annuity Association. We have placed over $6 billion of commercial real 
estate loans in Northern California in the past 20 years with these and other national 
lenders. We service the majority of the loans we place. 

We have reviewed the proposed Ground Lease between Ferry Building Investors, 
LLC and the Port of San Francisco. In our opinion the proposed ground lease as 
drafted can be financed on commercially reasonable terms. 

We have also reviewed the analysis of the ground lease prepared by the San Fran- 
cisco Budget Analyst for the Board of Supervisors. In that analysis, the Budget 
Analyst recommends that any sale, transfer or refinance of the ground lease be sub- 
ject to approval by the San Francisco Board of Supervisors. 

It is our opinion that a modif ication of the ground lease to incorporate a requirement 
that any sale, transfer or refinance be subject to the additional approval of the Board 
of Supervisors will decrease the value of the ground lease and significantly worsen 
the terms upon which the ground lease can be commercially financed. 



555 CALIFORNIA STREET, SUITE 2850, SAN FRANCISCO, CALIFORNIA 94104 
TELEPHONE (415) 433-1072 FAX (415) 433-1429 



Attachment i 
November 11, 1999 ?a»e 1 of 2 

Page Two 



A second governmental approval, by the Board of Supervisors, will in all likelihood 
greatly increase the time required to achieve certainty of transaction, and by in- 
creasing the uncertainty of the transaction, limit the universe of lenders and buyers, 
and decrease the value they will place on the building. The uncertainty and its re- 
lated impact on value will be even more severe in periods of tighter credit than pre- 
vails today. 

To preserve the value of your asset we strongly recommend that you not adopt the 
amendment to the Ground Lease proposed by the Budget Analyst. 

Sincerely yours, 



/M A*"^?-—* 



Thomas Trowbridge, Jr. 

Chairman and 

Cbuef Executive Officer 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 10 - File 99-2154 



Department: 



Item: 



Description: 



Estimated Costs: 



Public Transportation Commission (PTC) 
Municipal Railway (Muni) 

Ordinance approving the suspension of fares on the 
Municipal Railway from December 31, 1999, beginning at 
8:00 p.m., until January 1, 2000, ending at 6:00 a.m. 

The proposed ordinance would authorize the Public 
Transportation Commission (PTC) to provide free Muni 
service to all riders using the Muni on New Years Eve, 
from December 31, 1999, beginning at 8:00 p.m., until 
January 1, 2000, ending at 6:00 a.m. 

According to Mr. Bob Kuo of Muni, the estimated cost to 
the City to provide the proposed free Muni transit service, 
between 8:00 p.m. on December 31, 1999 through 6:00 
a.m. on January 1, 2000, is $100,000. Mr. Kuo states that 
$50,000 in increased costs would result from overtime 
costs to provide additional Muni staff for expanded 
service. In addition, Mr. Kuo states that approximately 
$50,000 in increased costs would result from lost fare box 
revenues. 



Comments: 



1. According to Ms. Roberta Boomer of PTC, the estimated 
number of persons attending 1999 New Years Eve 
celebrations in the City would range from 1 to 1 Vt million 
persons, which is higher than New Years Eve attendance 
in prior years. Ms. Boomer states that use of Muni 
transit service is also expected to be higher than prior 
years. 

2. According to Mr. Kuo, the City also offered free Muni 
transit service on New Years Eve last year. The 
estimated cost of providing such free Muni service during 
the subject hours last year was $71,738, including 
$35,000 for overtime costs, $32,000 from lost fare box 
revenues, and $4,738 for 10 motor coaches, staffed by 10 
transit operators, for transportation of Police Officers 
during New Years Eve ($35,000 plus $32,000 plus $4,738, 
totaling $71,738). Radio station KMEL donated $12,500 
to partially offset the total costs incurred by the City, 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

resulting in a net estimated cost to the City of $59,238 
($71,738 less $12,500). 

3. This year's estimated cost of $100,000 to provide such 
free Muni service is $28,262 higher than last year's costs 
in the amount of $71,738 because the number of riders 
using Muni is expected to increase on this New Years Eve, 
particularly because of the Millenium. 

4. Ms. Boomer states that the Muni would operate all of 
the regular OWL Service transit lines, which are the bus 
and streetcar lines normally operating between the hours 
of 1 a.m. and 5 a.m. daily, but would operate such transit 
lines every 15 minutes rather than the normal schedule of 
every 30 minutes. 

5. As stated in the resolution, the City intends to cover a 
portion of any expenses incurred as a result of providing 
free Muni service on New Years Eve with corporate 
donations. According to Mr. Kuo, KMEL plans to provide 
a contribution to partially offset costs, but the amount of 
the contribution has not yet been determined. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

68 



Memo to Finance and Labor Committee 
December 15, 1999 Finance Committee Meeting 



Item 11 -File 99-2196 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Budget: 



Department of Public Health (DPH) 

Hearing to consider the release of reserved funds in the 
amount of $270,000 to develop a children's mental health 
initiative. 

$270,000 

FY 1999-2000 General Fund Reserve 

During the FY 1999-2000 budget review, the Board of 
Supervisors appropriated and placed on reserve $270,000, 
for a children's mental health initiative, pending the 
submission of budget details. The Department of Public 
Health (DPH) is now requesting release of such funds to 
develop a Parent Helpline Program to assist families of 
children in need of mental health services. 

The subject funds would be used to develop a children's 
mental health initiative, including (a) a Parent Helpline 
to provide parents with information and consultation on 
mental health issues and services for children, including 
eligibility and access to the San Francisco Mental Health 
Plan, (b) an outreach campaign to advertise the Parent 
Helpline Program, and (c) an evaluation of the ongoing 
effectiveness of the Parent Helpline Program. 

A summary budget for the proposed program in FY 1999- 
2000 is as follows: 



Parent Helpline Program 
Outreach Campaign 
Program Evaluation 
Total 



$193,582 
45,418 
31.000 

$270,000 



The Attachment, provided by DPH, contains the budget 
details of the proposed contract with Support for Families 
of Children with Disabilities (SFCD) to support the above 
listed expenditures for the children's mental health 
initiative. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

AQ 



Memo to Finance and Labor Committee 
December 15, 1999 Finance Committee Meeting 



Comments: 



1. According to Ms. Anne Okubo of DPH, DPH would 
expend the subject reserved funds to amend an existing 
contract with SFCD, a nonprofit contractor with 
Community Mental Health Services, to operate the 
Parent Helpline, conduct the outreach campaign, and 
perform the program evaluation. Ms. Okubo states that 
SFCD is one of five existing hotline programs serving 
children and families, but that SFCD, which is staffed by 
parents with children with disabilities, has special 
expertise in providing services to parents. Under the 
proposed contract, SFCD would subcontract with the 
other four hotlines to provide links between the Parent 
Helpline and the other hotlines serving children and 
families. Ms. Okubo states that the Parent Helpline 
would provide information and consultation to parents by 
telephone and computer. Such information and 
consultation services would be available in Spanish, 
Cantonese, Vietnamese, and Russian, as well as English. 



2. Ms. Okubo states that the subject reserved funds are 
one-time only funds, recommended by the Finance and 
Labor Committee and approved by the full Board of 
Supervisors in the FY 1999-2000 budget process, to 
develop a children's mental health initiative. According 
to Ms. Okubo, the subject funds would be used to provide 
the proposed services for FY 1999-2000. 



Recommendation: 



Based on the prior policy decision of the Board of 
Supervisors to authorize the development of the children's 
mental health initiative, approve the requested release of 
reserved funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



70 



Attachment 



Department of Public Health 

Children's Mental Health Initiative 

Parent Helpline Program 



I. Program Cost 

Personnel 

Licensed Social Worker/Program Coordinator 

Psychiatric Social Worker/MFCC 

Peer Counselors 

Salaries 

Fringe Benefits 

Subtotal Personnel 



Months 


FTE's 


Rate 


Amount 


6 


1.00 


52,000 


26,000 


6 


1.00 


47,840 


23,920 


6 


2.00 


35,005 


35,006 
84,926 




24% 




20,382 



105,309 



On-Call Mental Health Services Provided by Bilingual Staff 

Hours 
On-Call Mental Health Services 295 



S/Hour 
S 90.00 



26,550 



Operating Costs 
Training 
Office Supplies 
Materials & Supplies (1) 
Telephone (2) 

Equipment (32,000/computer x 4 computers, 3800/printer x 2 printers) 
Subtotal Operating Costs 



Subtotal Program Costs 
Indirect Cost @ 10% 



3,000 " 

1,003 

6,300 

6,040 

9,600 



Subtotal 



25,943 



157,802 

15,780 

173,582 



Additional Hotline Services ($5,000 x 4 agencies) 
Total Program Costs 



20,000 



193,582 



II. Outreach Campaign 

Personnel 

Outreach Campaign coordinator 6 1.00 36,480 

Fringe 24% 

subtotal: 
Operating Expenses 
Office Supplies 

Printing & Reproduction (4000 copies @ $2.50/ copy) 
Translation (@ $200/100 words x 3900 words) 

Subtotal Operating Expenses: 
Total Outreach Campaign Costs 

III. Evaluation 
Personnel 

Evaluator 3 2.00 50,000 

Fringe 24% 

Total Evaluation Costs 

Total Cost 



18.240 
4,378 



22,618 



5,000 

10,000 

7,800 



22.800 



45,418 



25,000 
$6,000 


31,000 




$ 270,000 



(1 ) Assumes workstation @ $600, adjustable keyboard arm @ S275, chair @ $400, 
file cabinet @ S300 for 4 people. 

(2) Assumes cost of phone of $700/phone & service charge of $135/mo x 6 months for 4 phones. 



I \99-O00ud\bdotsups\MH reserved* 11/19/99 



Memo to Finance and Labor Committee 

December 15, Finance and Labor Committee Meeting 



Item 12 -File 99-2193 

Department: 

Item: 



Services to be 
Performed: 

Description: 



Airport 

Resolution approving the Controller's certification that 
public parking management services for the San 
Francisco International Airport can continue to be 
practically performed by private contractor at a lower cost 
for the year commencing July 1, 1999 than if work were 
performed by City and County employees. 



Public parking management services 

Charter Section 10.104 provides that the City may 
contract with private firms for services, if the Controller 
certifies, and the Board of Supervisors concurs, that such 
services can in fact be performed by private firms at a 
lower cost than similar work services performed by City 
employees. 

The Controller has determined that contracting for public 
parking management services to the Airport for FY 1999- 
2000 would result in the estimated savings as follows: 



Citv-Operated Service Costs Low 



High 



Parking & Taxicab Operations $12,496,522 $14,615,778 

Security Control 2,465,656 2,883,595 

Janitorial Services 1.488.170 1.765.210 

Total $16,450,348 $19,264,583 

Contractual Services Costs 



Comments: 



Parking & Taxicab Operations $10,149,236 $10,167,810 

Security Control 1,488,347 1,488,347 

Janitorial Services 1.414.997 1.414.997 

Total $13,052,580 $13,071,154 



Estimated Savings 



$3.397.768 $6.193.429 



1. Public parking management services for the Airport 
include the management of parking and taxicab 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, Finance and Labor Committee Meeting 

operations, security guard services and janitorial services, 
according to Mr. Fred Strong of the Airport. 

2. Public parking management services have been 
contracted out since 1971, the first year that these 
services were provided. 

3. The prior one-year contract, which commenced on July 
1, 1998 and expired on June 30, 1999, is with AMPCO 
System Parking Company. Mr. Strong states that 
AMPCO has provided public parking management 
services to the Airport for the last eight years. The 
Airport is exercising the third of four one-year options to 
renew this contract with AMPCO. This renewed one-year 
contract with AMPCO began on July 1, 1999. As such, 
the proposed resolution should be amended for 
retroactivity. 

4. The Contractual Services Costs used for the purpose of 
this analysis is AMPCO's projected FA' 1999-2000 cost for 
public parking management services. 

5. The Controller's supplemental questionnaire with the 
Department's responses is attached. 

Recommendation: Amend the proposed resolution to provide for retroactivity 

and approve the proposed resolution as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment 



CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 



Department Airport Commission 

Contract Services: Pubiic Automobile Parking 

Contract Period: July 1, 1999 to June 30, 2000 



1 . Who performed the activity/service prior to contracting out? 

This service has always been contracted out, it has never been operated by City personnel. 

2. How many City employees were laid off as a result of contracting out? 
None 

3. Explain the disposition of employees if they were not laid off. 

N/A 

4. What percentage of City employees' time is spent on services to be contracted out? 
N/A 

5. How long have the services been contracted out? Is this likely to be a one-time or an 
ongoing request for contracting out? 

Services have been contracted out since October 16, 1971, it is likely to remain contracted 
out. 

6. What was the first fiscal year for a Proposition J certification? Has it been certified for 
each subsequent year? 

It has been certified each year since 1980. 

Yes, it has been certified each year since Fiscal Ye3r 1980/81. 

7. How will the services meet the goals of your MBE/WBE Action Plan? 

Although this contract was not awarded to a MBEAA/BE firm in 1995, it must adhere to the 
City's non-discrimination ordinance contained in Chapters 123 & 12C of the City's 
Administrative Code. This contract contains MBEAA/BE goals which include "best effort to 
meet a 30% goal. 

3. Does the proposed contract require that the contractor provide health insurance for its 
employees? Even if not required, are health benefits provided? 
The contractor provides health insurance for its employees through union agreements. 

9. Does the proposed contractor provide benefits to employees with spouses? If so, are 
the same benefits provided to employees with domestic partners? If not, how does the 
proposed contractor comply with the Domestic partners ordinance? 
AMPCO and parent A3MI are working on a nation-wide-Domestic Partners Program. This 
contract is unchanged and the reauirement wasTfot included in the contract. 

/ ; ii i 



Department Representative: ■ )t*fi I 



Robert Rhoades/ Deputy-Airport Director - Business 



Telephone Number: (650) 794-4050 



PROPJCHARTER 10 Questionnaire 



Memo to Finance and Labor Committee 

December 15, Finance and Labor Committee Meeting 



Item 13 - File 99-2194 

Department: 

Item: 



Services to be 
Performed: 

Description: 



Airport 

Resolution approving the Controller's certification that 
employee parking management services for the San 
Francisco International Airport can continue to be 
practically performed by private contractor at a lower cost 
for the year commencing July 1, 1999 than if work were 
performed by City and County employees. 



Employee parking management services 

Charter Section 10.104 provides that the City may 
contract with private firms for services, if the Controller 
certifies, and the Board of Supervisors concurs, that such 
services can in fact be performed by private firms at a 
lower cost than similar work services performed by City 
employees. 

The Controller has determined that contracting for 
employee parking management services to the Airport for 
FY 1999-2000 would result in the estimated savings as 
follows: 



Comments: 



Citv-Operated Service Costs 

Salaries 
Fringe Benefits 
Total 

Contractual Services Costs 

Estimated Savings 



1. Employee parking management services include the 
operation and management of employee parking facilities 
at the Airport, including security guard services and 
janitorial sendees, according to Mr. Fred Strong of the 
Airport. 



Low 


High 


Salarv 


Salarv 


Step 


Step 


$2,123,429 


$2,509,392 


579.629 


640.302 


$2,703,058 


$3,149,694 


2.340.234 


2.340.305 


$362,824 


S809.389 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, Finance and Labor Committee Meeting 



2. Employee parking management services have been 
contracted out since 1971, the first year that these 
sendees were provided. 

3. The prior one-year contract, which commenced on July 
1, 1998 and expired on June 30, 1999, is with AMPCO 
System Parking Company. Mr. Strong states that 
AMPCO has provided both employee parking 
management services and public parking management 
services, under a single contract with the Airport, for the 
last eight years. However, according to Mr. Strong, in an 
effort to further the goals of its MBEAVBE Action Plan, 
the Airport is now proposing to award two (2) separate 
contracts for the provision of employee parking 
management services and public parking management 
services. Specifically, the Airport wishes to exercise the 
third of four one-year options to renew the existing 
contract with AMPCO for AMPCO to continue to provide 
only public parking management services to the Airport 
(see Item No. 10, File No. 99-2193 of this report to the 
Finance and Labor Committee). Mr. Strong states that 
AMPCO would no longer provide employee parking 
management services to the Airport. Instead, according 
to Mr. Strong, the Airport initiated an Invitation to Bid 
and selected ABC Parking, Inc./THOR, a certified 
MBE/SBE firm, to provide the proposed employee parking 
management services. ABC Parking, Inc./THOR was the 
only firm that responded to the Airport's Invitation to Bid, 
according to Mr. Strong. The amount of ABC Parking, 
IncTTHOR's bid for the provision of the proposed 
employee parking management services was $2,510,932 
on an annual basis, according to Mr. Strong. Mr. Strong 
advised that AMPCO continued to provide employee 
parking management services to the Airport for the two- 
month period of July 1, 1999 through August 31, 1999, 
because ABC Parking, Inc./THOR was not immediately 
able to assume responsibility for the provision of such 
services. As such, the proposed new one-year contract 
with ABC Parking, Inc./THOR began on September 1, 
1999 and expires on August 31, 2000. The Airport has the 
option to renew this proposed new contract with ABC 
Parking, Inc./THOR for four additional one-year periods. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, Finance and Labor Committee Meeting 

4. As noted in Comment No. 3, AMPCO began providing 
employee parking management services to the Airport on 
July 1, 1999 and ABC Parking, Inc./THOR assumed 
responsibility for the provision of such services two 
months later on September 1, 1999. As such, the 
proposed resolution should be amended for retroactivity. 

5. The Contractual Services Costs used for the purpose of 
this analysis is AMPCO's and ABC-THOR's projected FY 
1999-2000 costs for employee parking management 
services. 

6. The Controller's supplemental questionnaire with the 
Department's responses is attached. 

Recommendation: Amend the proposed resolution for retroactivity and 

approve the proposed resolution as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment 



CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 



Department Airport Commission 

Contract Services: Pubiic Automobile Parking 

Contract Period: July 1 , 1 999 to June 30, 2000 



1. Who performed the activity/service prior to contracting out? 

This service has always been contracted out, it has never been operated by City personnel. 

2. How many City employees were laid off as a result of contracting out? 

None 

3. Explain the disposition of employees if they were not laid off. 

N/A 

4. What percentage of City employees' time is spent on services to be contracted out? 

N/A 

5. Kow long have the services been contracted out? Is this likely to be a one-time or an 
ongoing request for contracting out? 

Services have been contracted out since October 16, 1971, it is likely to remain contracted 
out. 

6. What was the first fiscal year for a Proposition J certification? Has it been certified for 
each subsequent year? 

It has been certified each year since 1980. 

Yes, it has been certified each year since Fiscal Year 1980/81. 

7. How will the services meet the goals of your MBE/WBE Action Plan? 

A3C-Thor is a certified M3E/5BE Company and employs other MBE Companies at the 
Airport garages. 

8. Does the proposed contract require that the contractor provide health insurance for its 
employees? Even if not required, are health benefits provided? 

The contractor provides health insurance for its employees through union agreements. 

9. Does the proposed contractor provide benefits to employees with spouses? If so, are 
the same benefits provided to employees with domestic partners? If not, how does the 
proposed contractor comply with the Domestic partners ordinance? 

A3C-Thor has a domestic partners policy which meets-tffe~ofdinanf 




Department Representative: , -*~\ Sir i 



I 

Robert Rhoades, Deputy AiroortTJirecfor -'Business 
relephone Number: (650) 794-4050 



PROPJCHARTER 10 Quest, onru.re 



Memo to Finance and Labor Committee 

December 15, 1999 Meeting of the Finance and Labor Committee 

Item 14 - File 99-1869 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of November 10, 1999. 



Department: 
Item: 



Location: 
Lessor: 



Lessee: 

Effective Date of 
Lease Modifications: 

Description: 



Airport 

Resolution authorizing modifications to Lease No. 99- 
0035 between the DFS Group L.P. and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

New International Terminal Building (ITB) of the Airport 

City and County of San Francisco, acting by and through 
its Airport Commission 

The DFS Group L.P., a Delaware limited partnership 
("DFS") 

May of 2000 

The Airport and DFS have negotiated Lease No. 99-0035 
for "post-security" retail spaces which are located beyond 
the security checkpoints in the new ITB. The subject ten- 
year concession lease, which has yet to be signed but 
which is due to commence at the opening of the new ITB 
in May of 2000 and to expire in May of 2010, would cover 
52,946 square feet at 27 locations in the new ITB 1 . This 
lease was approved by the Board of Supervisors on April 
5, 1999 (Resolution No. 283-99). Under the subject 
concession lease, DFS would be responsible for both the 
direct provision of duty free 2 retail stores and the 
subleasing of non-duty free 3 retail stores. The table 
included in the Attachment provided by the Airport lists 
(a) DFS's proposed subtenants, (b) each subtenant's 
Disadvantaged Business Enterprise (DBE) status, (c) the 
retail facilities each subtenant would provide, and (d) the 
square footage of each subleased space. These subtenants 
would occupy a total of 17,087 square feet, or 30 percent 

(a) 

1 Ms. Lorri Vasquez of the Airport states that the reference in Lease No. 99-0035 to a total of 
51,914 square feet was based on approximate figures which have since been revised so that 
the approximate total space covered by the existing lease is actually 52,946 square feet. 

2 "Duty free" merchandise is defined as goods sold without taxation to international travelers 
for consumption outside of the United States of America. 

3 "Non-duty free" merchandise is defined as goods that are taxed at the point of sale. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Meeting of the Finance and Labor Committee 

of the total 57,353 square feet designated under the DFS 
concession lease. 

The proposed resolution would modify the concession 
lease between DFS and the Airport as follows: 

(1) The addition of 4,407 square feet of "pre-secunty" 
retail space, which increases the total amount of 
space covered by the subject concession lease from 
52,946 square feet in 27 locations to 57,353 square 
feet in 29 locations in the new ITB. The additional 
4,407 square feet of space is located before the 
security checkpoints in the new ITB, for two 
additional retail locations: (a) an 1,684 square foot 
Apothecary Store, which would sell various items sold 
in a standard drugstore, and ft) a 2,723 square foot 
Unisex Apparel Store, which would sell casual 
clothing. These two stores would have a five year 
term from May of 2000 to May of 2005 which the 
Airport can extend by one additional five year 
extension term for either or both stores. 



Comments: 



(2) Delegation to the Airport, pursuant to Section 1.2 of 
the concession lease, of the ability to modify the 
future size and usage of the retail space being leased 
to DFS without subsequent Board of Supervisors 
approval. 

1. The concession lease would require DFS to pay the 
Airport the greater of the two following amounts in rent: 
either (a) a minimum annual guarantee of $26,100,000 
which can be increased annually according to composite 
changes in the Consumer Price Index and passenger 
traffic, as set out in the concession lease, or (b) a 
percentage of annual gross revenues which is calculated 
on the following basis: 



Annual Gross Revenues 

Up to and including $50,000,000 
$50,000,000.01 - $100,000,000 
Over $100,000,000 



Dutv Free Non-Dutv Free 



15% 
20% 
25% 



12% 
14% 
16% 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Meeting of the Finance and Labor Committee 

By comparison to the above noted minimum annual 
guarantee of $26,100,000, in FY 1998-99 DFS paid the 
Airport $20,700,000 in rent, according to Mr. Peter 
Nardoza of the Airport. 

2. Under the proposed modifications to the previously 
approved DFS concession lease, which would provide 
4,407 additional square feet for an Apothecary Store and 
a Unisex Apparel Store, DFS would not pay an additional 
minimum annual guarantee to the Airport. DFS would 
only be required to pay the Airport rent for those stores 
on the basis of a percentage of annual gross revenues, 
calculated as follows: 



Annual Gross Revenues Percentage Rent 

Up to and including $500,000 12% 

$500,001 up to and including $1,000,000 14% 

Over $1,000,000 16% 



3. DFS would sublease the Apothecary Store retail space 
to Ms. Donne tta Stafford, a DBE owner who has already 
entered into two subleases with DFS for a Travel 
Accessories Store and a Leather Goods Store at the new 
ITB. Ms. Stafford also subleases retail space from DFS 
for a "health and herb concept" store in the existing 
International Terminal which sells some merchandise 
that is comparable to the merchandise which would be 
sold through her Apothecary Store in the new ITB. 

DFS would operate the Unisex Apparel Store retail space 
under a licensing agreement with Esprit. According to 
Ms. Vasquez, the Unisex Apparel Store would be the first 
single brand unisex apparel store in the Airport. 

4. Under the proposed modification to Section 1.2 of the 
concession lease, the Airport would be authorized to make 
the following changes to the concession lease, without 
subsequent approval from the Board of Supervisors: 

(a) relocate, expand, and/or contract the Lessee's 
premises if such relocation, expansion, and/or 
contraction is in the Airport's best interests; 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Meeting of the Finance and Labor Committee 

(b) permit a change in concept for a facility covered by 
the concession lease if such a concept change is in the 
Airport's best interests (for example, if the Airport's 
passenger profile indicated that there was no longer 
a need for a Unisex Apparel Store, but that there 
was a need for another category of store or 
restaurant); and 

(c) enter into the modifications to the concession lease 
which are necessary to implement such relocations, 
expansions, contractions, and/or changes in concept. 

5. The Budget Analyst recommends that the Airport 
renegotiate the proposed modifications with DFS in order 
to provide the Airport with an additional minimum 
annual guarantee payable by DFS to the Airport for the 
4,407 additional square feet to be allocated to DFS to 
operate an Apothecary Store and a Unisex Apparel Store. 

In response to the Budget Analyst's recommendation. Ms. 
Vasquez states that it would be inappropriate for the 
Airport to re-open negotiations with DFS over the 
proposed amendments given that this could jeopardize the 
signing of Lease No. 99-0035 approved by the Board of 
Supervisors on April 5, 1999. Ms. Vasquez states that the 
negotiations have had to address not only revenue issues, 
but also the Airport's desire to provide a range of services 
to the traveling public while dealing with complex retail 
industry and property management practices, within the 
context of a significant drop in sales for the duty free 
industry over the last two years. Ms. Vasquez states that 
DFS will be paying the Airport (a) a minimum annual 
guarantee of at least $261,000,000 over the ten-year term 
of the concession lease, and (b) additional rent from the 
proposed Apothecary and Unisex Apparel Stores. Ms. 
Vasquez states that DFS has agreed to add the 4,407 
square feet for Apothecary and Unisex Apparel Stores to 
its concession lease as a favor to the Airport, given its 
longstanding business relationship and mutual goal of 
offering services to the traveling public. According to Ms. 
Vasquez, DFS's agreement to assume responsibility for 
the additional space is in spite of two issues: (a) DFS will 
not gain any revenue from the Apothecary Store because 
the percentage rent required for this store by the Airport 
from DFS is exactly the same as the percentage rent 
required by DFS from the subtenant, therefore rendering 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

82 



Memo to Finance and Labor Committee 

December 15, 1999 Meeting of the Finance and Labor Committee 

the subtenant's rent payment a direct pass-through to the 
Airport, and (b) both the Apothecary and Unisex Apparel 
Stores are unproven retail concepts with unknown 
revenue potential which the Airport was previously 
unsuccessful in bidding out. 

6. In the professional judgement of the Budget Analyst, 
all retail space at the Airport is commercially valuable 
and, therefore, an upward adjustment of the minimum 
annual guarantee payable by DFS to the Airport for the 
addition of 4,407 square feet to its concession lease is fully 
warranted. 

7. At its November 10, 1999 meeting, the Finance and 
Labor Committee continued the subject resolution, 
requesting the Airport to renegotiate the proposed 
modifications with DFS in order to provide the Airport 
with an additional minimum annual guarantee payable 
by DFS to the Airport for the 4,407 additional square feet 
to be allocated to DFS to operate an Apothecary Store and 
a Unisex Apparel Store. Mr. Jon Ballesteros of the 
Airport states that the Airport discussed with senior DFS 
managers the implications of reopening formal lease 
negotiations to include the proposed additional minimum 
annual guarantee. These discussions took place at a 
formal meeting during the week of November 8, 1999 and 
in subsequent telephone discussions. The senior DFS 
managers objected to the imposition of an additional 
minimum annual guarantee. Mr. Ballesteros states that 
the Airport does not want to reopen formal lease 
negotiations with DFS because the Airport considers the 
current proposed lease to be very lucrative. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

83 



Attachment 
Page i or 5 



Carina Ccurrty 
H S«n rrancsco 




Will. L Brewn, Jr. 
M»yof 




Henry E. B*rman 
PrwMJorr; 


San Fr 


Larry Maooli 
Vi:s Pruidint 




Miefuti S. Strunifcy 


Lir.i; i S. Crayion 




Cjryl to 




JOHN L MARTIN 
Airport Dincsv 


Via Fax (41S-2S2-0461) 
Mr. Alan Gibson 




Budget Analyst 


. . 


Budget Analyst's Office 




1390 Market'Strcct, Suite 1025 
• San Francisco, CA 94102 




San Francisco International Airport 



GATTWAT IO TMI PACIFIC 



October 27, 1999 



Re: ' Post- Security Master Retail/Duty Free Concession Lease ("Lease") 

Dear Alan: 

Thank you again for your ongoing patience and assistance with this project. Set forth 
below are the answers to your questions of October 27, 1999. 

(a) What is the Airport trying to achieve by providing Apothecary and Unisex 
Apparel Stores? 

By providing an Apothecary Store and Unisex Apparel Store, the Airport is 
achieving the following goals: 

(1) Prevents these stores from being closed when the New International 
Terminal opens; 

(2) Provides a sophisticated variety of retail shopping facilities and avoid 
"cannibalizing** the other facilities; 

(3) Responds to the surveys which show that .Airport patrons repeatedly 
request a facility selling drugstore/apothecary products; 

(4) Have in the .Airport clothing products representing San Francisco-based 
manufacturers; and 

(5) Achieves DBE goals. 

DFS will sublease a portion of the space to Donnctta Stafford, a local DBE, for zs> 
. apothecary store. An Esprit store will be operated in the remaining space. Esprit is 
a local San Francisco-based company. Attached is the DBE Subleasing Plan, which 
achieves the 30% DBE goal. 

(b) Why were there no bidders for the proposed Apothecary and Unisex Apparel 
Stores? What particular elements of the bid requirements were deemed too 
restrictive by potential bidders for each store? 



Attachment 
Page 2 of 5 



Alan Gibson, Budge: Analyst 
October 27, 1999 
Page 2 

Set forth below is our understanding of why potential bidders declined to bid on these 
facilities when originally offered: 

(1) It appears that the lease specifications (ie. Minimum Annual Guarantee, 
percentage rent, improvement costs, etc.) were too high. 

(2) Some of the regionally-branded drugstore/apothecary stores stated that the 
facuity was too small compared to the size they are used to. 

(3) Prospective bidders advised staff that they did not bid given that the 
concepts were relatively new to the Airport and no one knew their revenue 
potentiaL 

(4) The retail market is strong, and the Airport must compete with other 
locations for strong concessionaires. Many regionally-branded 
drugstore/apothecary stores stated that this location did not fit within their 
business plan of building in local neighborhoods. 

(5) Finally^ many concessionaires who might otherwise have bid for these 
facilities were already committed to other Airport projects. 

(c) Why did the DFS Group agree to take over the two retail spaces given that (a) the 
sublease revenue from Donnetta Stafford will be a pass-through, and (b) there is no 
guarantee that they will make a profit from the Unisex Apparel Store. 

The Airport staff requested that DFS take these two additional spaces. Although 
we do not know the reason they were able to accommodate the Airport's request, it 
may relate to DFS's and the Airport's shared goal of creating a sophisticated and 
convenient shopping experience for the travelling public. 

(d) Why did Donnetta Stafford agree to sublease from DFS Group, if she didn't bid 
or wasn't previously prepared to enter into a direct concession agreement with the 
Airport? What has changed in the lease requirements to make the proposition more 
attractive? 

Donnetta Stafford currently has a sublease agreement with DFS, and we understand 
that she is comfortable working with DFS. DFS provides a lot of tenant support for 
smaller operators, such as assistance with tenant build-outs and training. Many 
small operators like the support of a larger operator. 

(e) Please explain Esprit's relationship to DFS Group with regard to the licensing 
agreement for the Unisex Apparel Store - why has Esprit agreed to enter this 
arrangement when it wasn't previously prepared to bid for/enter into (whichever 
applies) a direct concession agreement with the Airport? 

DFS entered into a licensing agreement with Esprit to sell and display Esprit 
merchandise. We understand that in December 1998, when the Airport requested 
bids for the Unisex Apparel Lease, Esprit was undergoing a change of 
management and was timid about venturing into an airport retail venue with which 
they had no experience. Also DFS' experience in Airport retail would provide 
Esprit (and Ms. Stafford) the opportunity to better their retail success. 



Attachment 
Page 3 or 5 



Alan Gibson, Budgs: Analyst 
Ooober 27, 1999 
Page 3 

(f) Reasons for not increasing the Minim um Annual Guarantee to reflect the 8.3 
percent increase in revenue-generating retail facility space being leased bv the 
DFS Group. 

First, we determined that it does not make sense to apply a Minimum Annual 
Guarantee to these additional facilities given that these concepts are not proven and 
the concessionaires are timid. After receiving no bids on the original packages, 
staff determined that there appears to be a disconnect between Airport desires and 
retailers' business plans. In this context, the Airport determined that percentage 
rent would be appropriate. Again, with the addition of these two facilities, rent 
paid to the Airport will increase. 

Second, even if the Airport were to apply a MAG to these facilities, it does not 
make sense to increase the MAG by 8.3% because most of the current MAG is 
driven by the duty-free facilities, not these types of facilities. Given that the profit 
margins and revenue generation will vary greatly by concept, a pro rata calculation 
of MAG will not work. These facilities would not be able to support a MAG that 
high. 

(g) What are the reasons for allowing the Airport to amend the Lease in Certain 
Respects without prior approval made by the Board of Supervisors? 

Due to the length of the term and complexity of the merchandise mix contained 
within this Lease, the Airport Commission authorized the Airport Director to 
amend the Lease to expand, contract, and relocate the premises and/or change a 
concept, provided the same is in best interests of the City. This authorization 
would minimize the administrative burden on the Airport Commission and the 
Board of Supervisors for minor amendments. For example, if the watch store 
turned out to be a lousy concept, the Airport would like the flexibility to replace 
that facility with a different concept, perhaps one that is more fully-developed in 
two or three years. Of course, the .Airport will still subject any such amendments to 
the other applicable City requirements. 

Finally, please recall that although we believe the Airport market is generally strong, we 
only had one bidder on this Lease, DFS. Given that the Airport is the gateway to the City, 
we know you share our goal of creating a positive shopping environment representative of 
San Francisco. We believe that this amendment will do so. 



Attachment 
?a?e k of 5 



Alan Gibson, Budget Analyst 
October 27, 1999 

Page 4 



Per your request, attached is DBE Subleasing Plan. Should you have any additional 
questions, please call me at (650) 794-4500. 



y yours 



Cc: BobRhoades 
Attachment 

JT:cp/sm 



^jptiCl 




Lorri A. Vasquez 

Assistant Deputy ASfport Director 

Concession Development and Management 



£3"d TdiOl 



Attachment 
Pase b or : 



Alan Gibson, Budget Analyst 

Oaobcr27, 1999 

Pa=c5 



POST-SECURITY MASTER RETAIL/DUTY FREE CONCESSION LEASE 
DBE SUBLEASING PLAN 



DBE Subtenant 



Ethnlcfty 



Retail Concept 



Square 
Footage 



RDG Concessions 



CaJStar Retail, Inc. 



Tan Enterprises. Inc. 



Donnetta Stafford 



Pacrfic Gateway 
Concessions, LLC 



African Am. Sunglasses 500 

Watches 1,856 

Travel Accessones 995 

Subtotal 3,351 

White California Gourmet 1 .464 

Packaged Food 1,034 
and Candy 

Subtotal — 2,498 

Asian Tee Shirts 300 

Tee Shirts 354 

Team Sports 1.C27 

Subtotal 1,681 

African Am. Travel Accessories S70 

Leather Goods 2,053 

Apothecary 1,664 

Subtotal 4.707 

Hispanic Newsstand 473 

Newsstand 375 

News & Gift 906 

News & Gift 982 

News & Gift eS2 

Packaged Food & 1,222 

Candy 

Subtotal 4,850 

DBE Sublease Total 17.087 

Master Concession Total 57,353 

DBE Total 30% 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 16 - File 99-2236 



Item: 



Ordinance to amend Chapter 37, Section 37. 9A of the 
City's Administrative Code to provide for relocation 
benefits of $4,500 to low-income, elderly and disabled 
tenants. 



Description: The proposed ordinance would amend the City's 

Administrative Code to increase the amount of 
relocation payments that low-income, elderly and 
disabled tenants are entitled to receive from the 
property owner when a landlord seeks an eviction 
based on Section 37.9(a)(13), Ellis Act eviction. 
Currently, under the City's Administrative Code, 
tenants who receive an eviction based on the Ellis Act 
provisions, who are determined to be low-income are 
entitled to receive relocation benefits of the following 
amounts: (1) $1,500 if the unit is a studio (one or two 
rooms), (2) $1,750 if the unit is a one-bedroom (three 
rooms), and (3) $2,500 if the unit contains two or 
more separate bedrooms. Currently, the City's 
A dminis trative Code also provides for tenants who 
are determined to be 62 years of age or older or who 
are disabled to receive $3,000 for relocation benefits, 
irrespective of the size of their units, from such 
evictions. 

Under the proposed ordinance, all qualifying low- 
income, elderly and disabled tenants who receive an 
eviction based on the Ellis Act provisions would be 
eligible to receive relocation benefits of $4,500 from 
their landlord, regardless of the size of their housing 
units. 



Comment: 



In recognition of the fact that all of the relocation 
payments based on the Ellis Act eviction provisions, 
are to be paid by the property owner and not the City, 
Mr. Joe Grubb of the Rent Arbitration and Control 
Board Hlent Board) reports that the proposed 
ordinance will have no fiscal impact on either the City 
generally or on the operations of the Rent Board. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Recommendation: Approval of the proposed ordinance is a policy matter 
for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

90 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

Item 17 - File 99-2015 

1. This hearing is to consider issues faced by San Francisco family childcare 
providers, including receiving referrals from the San Francisco resource and 
referral agencies, receiving funds for facilities upgrades, and receiving 
professional/business development assistance. 

2. Three major types of childcare providers operate in the San Francisco. 

(a) Childcare centers are facilities licensed by the State that employ teaching and 
paraprofessional staff to provide childcare. 

(b) Family childcare providers are licensed by the State to care for up to eight 
children, including the children of the care provider under the age of six, in their 
home. In addition, some family childcare providers are licensed by the State to 
care for nine to fourteen children, including those of the provider and of any 
assistants, in the provider's home, with one or more assistants present. 

(c) Exempt providers are exempted from State licensing if they care for no more 
than one family's children in addition to their own. 

3. According to Ms. Teresa Joseph of the Department of Human Services (DHS), 
currently there are 19,701 State-licensed childcare slots in San Francisco. Of the 
19,701 State-licensed childcare slots, 16,131, or 82 percent, are childcare center 
slots, and 3,570, or 18 percent, are family childcare provider slots. 

4. There are four main types of funding for childcare services in San Francisco. 

(a) Childcare center spaces are subsidized by the California Department of 
Education (CDE), which contracts directly with San Francisco childcare 
centers, primarily through the San Francisco Unified School District. 

(b) Vouchers are funded primarily by combined State and Federal funds, especially 
Temporary Aid to Needy Families (TANF) 1 funds. In addition, the Children's 
Fund provides monies for vouchers for families not eligible for CalWORKS, the 
California TANF program. 



1 TANF is the Federal cash aid program for families with income below the Federal poverty level. In 
California, TANF is implemented as CalWORKS. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

(c) The Child Care Facilities Fund (CCFF), which is funded by City and Federal 
funds, provides grants to family childcare providers for one-time capital 
expenses and to childcare centers for predevelopment grants and financing for 
facilities improvement and expansion. 

(d) San Francisco's High Quality Child Care Initiative, which is funded by City 
funds, provides funding for various projects, including mental health 
consultation. 

Attachment I, provided by DHS and the Department of Family, Youth, and Their 
Children (DCYF), contains a list of the funding sources for childcare and the 
allocation of funds by provider type for FY 1998-99. 

5. Except for the CDE subsidies, which are controlled by the State, vouchers 
provide the largest amount of subsidies for childcare. Ms. Joseph states that, 
currently, approximately 3,586 children receive childcare vouchers each month. Of 
the 3,586 monthly vouchers, 2,088 or 58 percent are allocated to exempt childcare 
providers, 839 or 23 percent are allocated to licensed family childcare providers, and 
607 or 17 percent are allocated to licensed childcare centers. The remaining 2 
percent are allocated to exempt childcare centers. 2 

6. Vouchers are funded by a combination of State, Federal, and City funding. 

(a) Combined State and Federal TANF funds are used to provide childcare vouchers 
for families participating in CalWORKS welfare-to-work program or who have 
transitioned from the CalWORKS cash aid program within the previous 24 
months. 

(b) City Children's Fund monies are used to provide childcare vouchers for low- 
income working families not eligible for CalWORKS assistance. 

(c) Combined State and Federal funds are used to provide childcare vouchers for 
families identified by Family and Children's Services (FCS) and who are 
currently involved in protective services or who are referred by FCS to prevent 
the opening of protective services cases. 

Families receiving childcare vouchers may choose the type of childcare provider. 
However, families receiving vouchers from Children's Fund monies axe not eligible 
to use such vouchers for exempt childcare providers. 



2 Exempt centers are centers that provide childcare for a limited number of hours, such as before 
school and after school care. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 

7. Tbe Department of Human Services (DHS) contracts witb tbe Children's Council 
of San Francisco to manage and administer the childcare voucher subsidies. As 
shown in Attachment II, in FY 1999-2000 the Children's Council contract is 
$29,420,779, of which $2,000,000 or 7 percent comes from the Children's Fund, and 
$27,420,779, or 93 percent, comes from combined State and Federal funds. 

8. The Children's Council subcontracts with Wu Yee Children's Services, a 
nonprofit agency, to provide childcare case management and childcare payments for 
clients. The Children's Council serves approximately 80 percent of the clients and 
Wu Yee serves approximately 20 percent, including all of the Asian-language 
speaking clients. The two nonprofit agencies have full financial responsibility for 
payments to licensed and exempt childcare providers caring for children of clients. 
They determine and collect parent fees, according to State requirements, and 
combined with the vouchers, provide full payment to the childcare providers. 

9. DHS has three other contracts, funded with combined State and Federal funding 
in FY 1999-2000, to provide childcare services. Attachment III, provided by DHS, 
contains a summary of the DHS childcare services contracts. 

10. In summary, as shown in Attachment I, expenditures for childcare centers and 
family childcare providers in FY 1998-99 were as follows: 

(a) The California Department of Education contracted directly with childcare 
providers in San Francisco for a total of $45,532,858, of which $45,000,000 was 
expended on childcare centers and $532,858 was expended on family childcare 
providers. 

(b) The Child Care Facilities Fund provided $482,000 in grants, of which $82,000 or 

17 percent was for childcare centers and $400,000 or 83 percent was for licensed 
family childcare providers. In addition, the Child Care Facilities Fund provided 
$2,581,000 to childcare centers as part of the Federally-funded Section 108 
Child Care Center Loan Guarantee Program. 

(c) The High Quality Child Care Initiative provided $2,966,500 in funds, of which 

$1,875,000 or 73 percent was for childcare centers and $686,500 or 27 percent 
was for licensed childcare providers. 

(d) The City provided $17,594,715 in childcare vouchers, of which $3,161,122 or 18 
percent was for childcare centers, $6,604,864 or 38 percent was for licensed 
family childcare providers, and $7,828,729 or 44 percent was for exempt family 
childcare providers. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

December 15, 1999 Finance and Labor Committee Meeting 




Harvey M. Rose 



cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakey 






BOARD OF SUPERVISORS 
BUDGET ANALYST 

94 



Attachment I 



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Attachment II 



Contract Summary; 

Contractor: Children's Council of San Francisco (See Appendix A for detail) 
Description: The contract provides for the following childcare programs: CalWORKs- 
Stage I, CalWORKs-Stage II. Family Preservation (Maintenance of Effort), and City 
Childcare subsidies. Funds for the development of neighborhood-based provider 
networks are also included. The purpose of the contract is to increase the service level of 
CalWORKs Stages I and II and to contract for the increasing enrollment and costs in both 
of these programs. The contract also includes an increase for city subsidies, as approved 
by the Board of Supervisors, as well as a number of capacity building initiatives funded 
by CDSS and state CalWORKs funds. 

Purpose: (1) Management and administration of CalWORKs child care 

programs to increase the success of families participating in the 
CalWORKs program by assisting them with their child care 
arrangements. 

(2) Manage and administer City funds to assist non-CalWORKs 
families by assisting them with their child care arrangements. 

(3) Manage and administer Family &. Children's Services child 
care for Family Preservation-type cases. 

(4) Provide "Trustline" service to facilitate background 
investigations of child care providers. 

(5) To ensure no reduction of services to previously eligible 
groups, and coordinate eligibility between various subsidy 
programs; 

Program Design: (1) Inform participants about the availability and types of child 
care. Assist participants to locate or arrange for child care, and 
case manage eligible families regarding child care need and 
monitor and directly pay providers; 

(2) Expedite background investigations of child care providers 
(Trustline services); 

(3) Families with children at risk of abuse or neglect, for whom 
child care has been determined as an appropriate resource by a 
child welfare worker. 

Contract Amount: FY 99/00 = S29.420.779 

Source of Funds: approx. 7% County, 93% State-Federal 



Attachment III 
Page 1 of 2 



Contractor: Children's Council of San Francisco 

Description: Development of a pilot program for special needs childcare supportive 
services for children (ages 0-12) of families eligible for CalWORKs childcare. The 
Children's Council will recruit, train, and support licensed childcare providers in both 
center and family childcare home-based settings in order to assist them with the 
placement of CalWORKs special needs children and to improve the quality of special 
needs childcare system-wide. It is estimated that 10% of children from CalWORKs 
families have special needs, as defined by the Americans with Disabilities Act (ADA). 
Although ADA mandates that all childcare facilities be accessible to special needs 
children, many providers have difficulty accepting and adequately responding to these 
children's special needs. Families enrolled in approved CalWORKs welfare -to-work 
activities are eligible for childcare services for their children. Many TANF families with 
special needs children qualify for an exemption from welfare-to-work activities, but a 
large percentage choose to participate in work, training, or other approved activities. The 
availability of adequate childcare is crucial in enabling families to make the transition 
from welfare to work, particularly for families with special needs children. The 
Contractor will provide training and technical assistance to Children's Council and Wu 
Yee staff, DHS Employment Specialists, and the childcare provider community to 
familiarize them with issues of CalWORKs families with special needs children. The 
goals of the pilot program will be to implement innovative, practical solutions to the 
problems childcare providers experience that deter them from serving special needs 
children, to inform and assist parents with locating and placing their special needs 
children in settings that meet their needs, and to track families for whom no special needs 
care was available in order to inform planning and advocacy for systems changes. As a 
capacity-building initiative, it is anticipated that the number of special needs children 
successfully placed in childcare will increase through the Contractor's coordination of 
services. 

Contract Amount: FY 99/00 = S342,000 
Source of Funds: 80% State, 20% Federal, 0% County 



Attachment III 
Page 2 of 3 



Contractor: California Association of Health, Education, Employment, and Dignity, Inc. 
Description: Development of a licensed 24-hour emergency back-up childcare pilot 
program to reduce disruptions of work or job training for families receiving CalWORKs 
childcare subsidies. Currently, there is only one licensed emergency back-up childcare 
program in San Francisco, this program is inaccessible for most CalWORKs families. 
The "KIDCARE: Access to Emergency Back-up Childcare" collaborative, led by 
CAHEED, will provide emergency back-up childcare to CalWORKs eligible Stages I & 
II families whose childcare is temporarily interrupted because of an existing childcare 
provider's illness, vacation, holiday or other unavailability to provide childcare. This 
will be done by offering a selection of available childcare slots in each of the targeted 
neighborhoods initially consisting of Bayview Hunter's Point, Yisitacion Valley, Mission 
and OMI neighborhoods, to families needing childcare on a temporary basis. Eventually, 
if the KIDCARE pilot is successful, the goal is to expand sen-ices to include 
neighborhoods such as Western Addition, South of Market, Tenderloin and other low- 
income neighborhoods. CAHEED will purchase/reserve a number of slots and will use 
slots that become available through daily vacancies at participating licensed center and 
licensed family childcare providers. 
Contract Amount: FY 99/00 = S445.389 
Source of Funds: S0% State, 20% Federal, 0%County 



Attachment III 
Page 3 of 3 



Contractor: Whitney Young Child Development Center 

Description: Development of a licensed 24-hour mildly ill childcare pilot program to 
reduce disruptions of work or job training for families receiving CalWORKs childcare 
subsidies. Currently, there are no licensed mildly ill childcare programs in San 
Francisco. This resource limitation has important implications for the ability of parents 
to fulfill the work requirements accompanying welfare reform. The "WE CARE Mildly 
111 Childcare Enterprise" collaborative project, led by Whitney Young, will provide 
access to mildly ill childcare for CalWORKs Stages I & II and TANF families in the 
City's southeast sector, which has a high incidence of health risks. This mildly ill 
childcare pilot program will provide families with options for continuous childcare 
resources, in the event of mild illnesses of their children, in order to reduce the possibility 
of work or training disruptions for parents. It will also be designed to reduce the 
likelihood that young children will be left home unattended when they are too ill to attend 
school or other licensed childcare, to link children and their families to health services, 
and to educate parents and caretakers regarding children's health needs. 
In its start-up year, the mildly ill childcare program will serve a minimum of 500 
children. Once the program has been established, service levels are anticipated to 
increase. The level of service provision will be assessed prior to requesting renewal of 
the contract. The Whitney Young Child Development Center, who is providing space in 
its existing site on an in-kind basis, will develop a coordinated Level I and Level EL state 
licensed mildly ill childcare center. The center will provide 12 mildly ill child care slots 
for children aged 2-12. Eight additional slots for mildly ill infants and toddlers will be 
made available through licensed family home settings. As with any childcare center, the 
program design supports the provision of care to non-CalWORKs families. This will 
ensure program viability and decrease the incidence of work disruptions for working poor 
families. 

Contract Amount: FY 99/00 = S720,165 
Source of Funds: 80% State, 20% Federal, 0% County 




City and Countv of San Francisco cnyHaii 

1 Dr. Carlton B. 

Meeting Minutes Goodiett Place 

San Francisco, CA 

Finance and Labor Committee 94102-4689 



Monday, December 20, 1999 9:30 AM City Hall, Room 263 

Special Meeting 

Members Present: Sue Bierman, Tom Ammiano. 
Members Absent: Leland Y. Yee. 



Meeting Convened 

The meeting convened at 9:36 A.M. 

992236 [Increasing Tenant Relocation Benefits] 
Supervisor Ammiano 

Draft ordinance (amends Administrative Code Secticn 37. 9A) concerning tenant rights in certain 
displacement, providing for relocation benefits of S4,500 to low- income, elderly and disabled tenants. 

(Amends Section 37. 9A.) 

12/6/99, RECEIVED AND ASSIGNED to Finance and Labor Committee. Sponsor requests this matter be scheduled at the December 15, 

1999 meeting. 

12/15/99, CONTINUED. Continued to Special meeting of December 20, 1999 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Joe Grubb, Executive Director, Rent Board; 
Ted Lakey, Deputy City Attorney; Janet Amille; Andrew Long; Ted Gullieson, SF Tenants Union; Ricardo B. 
Leons, Senior Action Housing Network; Peter Chin; Bill Quan; Marilyn Cosentino; David Crommie; 
Anastasia Yovanopoulos, Noe Valley Tenants Association; Jose Morales; Sara Short; Rebecca Logue-Bovee, 
Housing Rights Committee; David Brone; Nancy Tucker, Small Property Owners of San Francisco. 
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE by the following vote: 

Ayes: 2 - Bierman, Ammiano 

Absent: 1 - Yee 

Ordinance amending Chapter 37 of the San Francisco Admimstrative Code ("Residential Rent Stabilization 
and Arbitration Ordinance") by amending Section §37. 9A to increase the amount of relocation payments made 
by landlords to low-income tenants evicted pursuant to the Ellis Act (California Government Code §§7060 et 
seq., which provides owners rights to withdraw units from residential rental): relocation payments for low- 
income tenants are increased from the current range of $1,500 - 52,500 (depending upon the size of the unit) 
to a standard 54,500. 

(Amends Section 37. 9A.) 

RECOMMENDED AS COMMITTEE REPORT by the following vote: 

Ayes: 2 - Bierman, Ammiano DOCUMENTS DEPT 

Absent: 1 - Yee 

SEP 1 8 20C0 

ADJOURNMENT SAN FRANC | SC0 

PUBLIC LIBRARY 
The meeting adjourned at 10:17 A.M. 



City and County of San Francisco I Printed at 11:52 ,<M on 12/27/99 



f 

10.254 

3p «*••- 1 



Public Library, Gov't Information Ctr.. 5 th Fir. 
Attn: Susan Horn, Dept. 41 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



DOCUMENTS DEPT. 

DEC 2 1993 
SAN FRANCISCO 



1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



PUBLIC LIBRARY 



December 16, 1999 

TO: Finance and Labor Committee 

FROM: 4 Budget Analyst 

SUBJECT: ^December 20, 1999 Special Finance and Labor Committee 
Meeting 

Item 1 - File 99-2236 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of December 15, 1999. 

Item: Ordinance to amend Chapter 37, Section 37. 9A of the 

City's Administrative Code to provide for relocation 
benefits of $4,500 to low-income, elderly and disabled 
tenants. 



Description: 



The proposed ordinance would amend the City's 
Administrative Code to increase the amount of 
relocation payments that low-income, elderly and 
disabled tenants are entitled to receive from the 
property owner when a landlord seeks an eviction 
based on Section 37.9(a)(13), Ellis Act eviction. 
Currently, under the City's Administrative Code, 
tenants who receive an eviction based on the Ellis Act 
provisions, who are determined to be low-income are 
entitled to receive relocation benefits of the following 
amounts: (1) $1,500 if the unit is a studio (one or two 
rooms), (2) $1,750 if the unit is a one-bedroom (three 
rooms), and (3) $2,500 if the unit contains two or 
more separate bedrooms. Currently, the City's 
Administrative Code also provides for tenants who 



Memo to Finance and Labor Committee 

December 20, 1999 Special Finance and Labor Committee Meeting 

are determined to be 62 years of age or older or who 
are disabled to receive $3,000 for relocation benefits, 
irrespective of the size of their units, from such 
evictions. 

Under the proposed ordinance, all qualifying low- 
income, elderly and disabled tenants who receive an 
eviction based on the Ellis Act provisions would be 
eligible to receive relocation benefits of $4,500 from 
their landlord, regardless of the size of their housing 
units. 



Comment: 



Recommendation: 



In recognition of the fact that all of the relocation 
payments based on the Ellis Act eviction provisions, 
are to be paid by the property owner and not the City, 
Mr Joe Grubb of the Rent Arbitration and Control 
Board (Rent Board) reports that the proposed 
ordinance will have no fiscal impact on either the City 
generally or on the operations of the Rent Board. 

Approval of the proposed ordinance is a policy matter 
for the Board of Supervisors. 



^"-HL. 




cc: Supervisor Yee 

Supervisor Bierman 
President Ammiano 
Supervisor Becerril 
Supervisor Brown 
Supervisor Katz 
Supervisor Kaufman 
Supervisor Leno 
Supervisor Newsom 
Supervisor Teng 
Supervisor Yaki 
Clerk of the Board 
Controller 
Legislative Analyst 
Matthew Hymel 
Stephen Kawa 
Ted Lakev 



BOARD OF SUPERVISORS 
BUDGET ANALYST